TMI Blog1967 (8) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 of 1966. The petitioner in this case has made the assessing officer as the Ist respondent, the State of Madras as the 2nd respondent, the Union of India as the 3rd respondent, the Central Board of Revenue as the 4th respondent, and the Collector of Central Excise as the 5th respondent. The petitioner's case is that on or about September, 1966, he was served with notices by the 1st respondent calling upon him to furnish particulars of sales turnover in Terylene cloths for the years 1961-62, 1962-63, 1963-64, 1964-65 and 1965-66. The notice recited that such particulars were required for purposes of revision of assessment for those years, as the turnover in Terylene cloths is taxable under the Madras General Sales Tax Act, 1959. The second notice is more telling in that it has included the reasons why the 1st respondent was issuing the said notice. In the second notice, the 1st respondent would have it that Terylene and Nylon fabrics are made from synthetic fabrics produced from chemicals and not from common natural bases, and therefore they do not come under any of the classes of goods specified in item 4 of the Third Schedule to the Madras General Sales Tax Act, 1959, which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate had no authority to levy. To this the 1st respondent has filed a counter. His contention is that the goods in question are liable to tax under the provisions of the Madras General Sales Tax Act. He states that these goods do not come under the nomenclature of artificial silk. His main contention is that Terylene etc., belong to a class of synthetic man-made fibre which is neither cellulosic or non-cellulosic filament yarn. According to him, they belong to a class of polyamide or polyester group whose basic material is a petrochemical and not a natural product. The Ist respondent therefore contends that the goods are not artificial silk. He also states that as the question involves a finding of a jurisdictional fact, which has to be determined only by the assessing authority, the petitioner cannot invoke the jurisdiction of this Court under Article 226 of the Constitution to find the same. He states that it is primary for the assessing authority to decide whether a particular transaction involves sale of artificial silk and that the onus is upon the petitioner to establish that the goods do come within the expression, "artificial silk". The 2nd respondent, the State of Madras, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther standards as applied by the industry, by Governmental authorities and by the populace, the words in question cannot be taken out of the expression, "artificial silk", then they have to be understood as such. Bearing in mind also the principle laid down by the Supreme Court in Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant Singh Charan SinghCivil Appeal No. 2011 of 1966; [1967] 19 S.T.C. 469. that the construction of the words in a statute is to be adopted to the fitness of the matter of the statute, we shall now consider the materials placed before us which form the source of authority to find whether Terylene, Terene, Dacron, Nylon, Nylex etc., do come within the umbrage of artificial silk. "Artiflcial silk", according to the Oxford Concise Dictionary, Third Edition, 1934, means silk drawn by various processes out of viscid matter. In the Fifth Edition of the same dictionary of 1964, "artificial silk" is explained as "now known as rayon" and means thread or yarn made from cellulose. "Silken" is explained as equivalent to soft, lustrous as silk. In the Shorter Oxford Dictionary, Third Edition, 1944, the meaning of "Nylon" is given as "proprietary name; a synthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general name 'Petro-Chemicals'." The article continues: "All synthetic fibres begin with the preparation of a polymer which consists of extremely long chain-like molecules......... Synthetic fibres have been divided into several classes such as Polyamides, polyesters, polyacrylics and polyvinylics according to their chemical nature............... Polyester fibre is useful in blending with wool and cotton. Its durability, its retention of crease and its blending properties make it extremely useful for textiles of various types." The underlining is ours*. In our opinion, this article cannot support the revenue at all. In fact, this supports the view that notwithstanding the base being mineral oil or a petrochemical, yet synthetic fibres obtained by such adaptation are classified inter alia as polyester fibre, to which class Terylene belongs, even according to the Oxford Dictionary. Learned Advocate-General then invited our attention to another article under the caption "Survey of Man-made Fibre Industry" by Dr. A.N. Kapur, Executive Director, National Research Devolopment Corporation of India. The following excerpts therein are useful in the instant case: "Man-made fibres are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Terylene, Terene and Dacron fabrics are manufactured from polyester non-cellulosic filament/art silk fabrics as per the Art Silk Textiles (Production and Distribution) Control Order, 1962." Vide Government of India, Ministry of Commerce, Textile Commissioner's letter No. 1/64/ASB/G/Vol. III/2, dated 3rd January, 1967. The Inspector of Central Excise, Gwalior Range, Gwalior, in his letter No. 22/67 dated 16th February, 1967, addressed to the manufacturers would say that Terylene, Nylon, etc., fabrics are assessed under Tariff item 22 of the Central Excises and Salt Act,1944, under description, "art silk fabrics". The contention of the Ist respondent that since Terylene, Terene, Dacron and Nylon belong to the class of synthetic man-made fibre which is neither cellulosic nor non-cellulosic, but belong to the class of polyamides and polyesters and since their basic material is petrochemical or oil, it should be classified not under artificial silk, is something which cannot be countenanced in view of the classifications and categorisation made by expert Government officials who are expected to consider the nature of these products from time to time. Even otherwise, industrial jou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the goods of special importance in inter-State trade and commerce. Even so, the Additional Duties of Excise (Goods of Special Importance) Act, 1957, adopts the same meaning for artificial silk as equivalent to rayon. That rayon is man-made and thus synthetic fibre is not in dispute. Thus the above Acts of Parliament always treated the products in question in pari materia with rayon and levied duties on them as artificial silk. The revenue however presses into service the definition of "artificial silk" in Art Silk Textiles (Production and Distribution) Control Order, 1962. The definition reads thus: "(a) 'art silk yarn' means yarn manufactured from cellulosic and non-cellulosic materials and includes (a) man-made cellulosic spun fibre yarn, (b) man-made non-cellulosic spun fibre yarn, (c) man-made cellulosic filament yarn, and (d) man-made non-cellulosic filament yarn. (b) 'art silk cloth' means any fabric made wholly from art silk yarn or partly from art silk yarn and partly from any other yarn provided such fabric contains not less than 60 per cent of art silk yarn." The observations of the Supreme Court in State of Gujarat v. Sakarwala Brothers[1967] 19 S.T.C. 24. , that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds, if the assessing authority is not right in having assumed jurisdiction in it to levy sales tax on its own selfserving finding that Terylene, Terene, Dacron etc., are not artificial silk, then a writ of prohibition can issue in order to avert the application and commandment of law, resulting from such an erroneous assumption of jurisdiction. We are therefore unable to agree with the learned AdvocateGeneral that these writs are not maintainable. After having thus gathered the necessary material to find out the true import, content and meaning of the expression "artificial silk" and from the interpretation given to it by the trade, experts, Governmental departments, as also statutory references thereto ever since 1934, it is very difficult to accept the contention of the revenue that artificial silk cannot mean and include the products under consideration. No doubt, departmental rulings by themselves cannot be a guide to courts to find out the true meaning of words. But that meaning which the trade, Government officials and statutes attribute to the words "artificial silk" must be taken to be the ordinary and popular meaning of the same. It cannot be denied that the above group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or mineral oil. Such overwhelming authority is available that it would not be safe to take out artificial silk appearing as item 4 in the Third Schedule to the Madras General Sales Tax Act,1959, totally out of the popular context and meaning attributed to it and accept the contention of the revenue that the articles under review are not artificial silk. The Central Government which has been made a party to these writ petitions categorically avers that Nylon, Terylene, Terene, Dacron, Nylex etc., are considered as artificial silk being man-made fibres and that this view has been prevalent throughout India about the classification of these fibres and adds that even factually and technically, the products are textiles coming under the category of artificial silk. These goods are subject to the additional duty of excise under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, and there has not been any controversy about the character of the goods at any time. They are of the view that by virtue of the agreement between the State and the Central Government, the Centre is collecting the additional excise duty on these fabrics and distributing a portion of the same o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Constitution. In our view, no distinct, independent and telling circumstances have been brought to our notice which compel the revenue to reopen the assessments of the petitioner from 1961 in order to impose a new levy on Terylene, Terene, Dacron etc., on the only ground that they cannot be considered or deemed to be artificial silk. Such a bare, arbitrary and subjective satisfaction on the part of the Ist respondent cannot be allowed to run its course. When a Tribunal has assumed in itself jurisdiction when it has none and is threatening in pursuance of such assumed jurisdiction to do an act which is violative of the vested rights of a citizen, then the Courts can and ought to interfere under Article 226 of the Constitution of India and issue a writ of prohibition to interdict such authority from exercising such illegal jurisdiction. We are, therefore, satisfied, in the circumstances of this case, that the purported exercise of jurisdiction by the 1st respondent to levy the impost on Terylene, Terene, Dacron, Nylon etc., and the impugned notices issued by him are totally violative of the rights of free trade and is obviously in the exercise of jurisdiction when he has none. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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