TMI Blog1978 (3) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... essee to the Sales Tax Appellate Tribunal. The Tribunal took the view that cotton yarn dyed and coloured is nevertheless cotton yarn within the meaning of entry 4(ii) of the Second Schedule of the Kerala General Sales Tax Act, 1963; that no manufacturing process was involved in dyeing the yarn and that, as a result of dyeing, the yarn was not converted into a different article or commodity. In these circumstances, the Tribunal was of the view that the levy of sales tax was not attracted and that the Deputy Commissioner's order was unjustified and illegal. The Tribunal allowed the assessees' appeals in these three cases. The revisions have been preferred by the learned Government Pleader on behalf of the revenue. 2.. Section 5 is the charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with which we are concerned is entry 4(ii) of the Second Schedule, which is as follows: ------------------------------------------------------------------------------- "Sl. Description of the goods Point of levy Rate of No. tax ------------------------------------------------------------------------------- 4(i) Cotton, that is to say, all kinds At the point of first sale 4 per of cotton (indigenous or imin the State by a dealer cent." ported) in its unmanufactured who is liable to tax state, whether ginned or ununder section 5. ginned, baled, pressed or otherwise, but not including cotton waste. (ii) Cotton yarn, other than handspun yarn, but not including cotton yarn waste. --------------------------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umn of Schedule II. Entry No. 20 in that schedule was: "Yarn excluding sewing and knitting thread." It was observed: "What the petitioners sell may be dyed yarn, but it is yarn all the same. No exception has been made in the case of dyed yarn in the sense that the yarn does not cease to be tax-free merely because it is dyed. In the circumstances, therefore, the petitioners' contention that their transactions in respect of the sales of dyed yarn are not taxable under the Act must be upheld." In Kailash Nath v. State of U.P.[1957] 8 S.T.C. 358 (S.C.)., the Supreme Court had occasion to consider the scope of an exemption notification issued under the provisions of the U.P. Sales Tax Act, 1948. The exemption was in respect of sales tax on c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under article 286 would not apply. It seems to us that there is a vast difference between prepared cashew-nuts and printed cloth and the observations there can, by no stretch of imagination, have any application to this case. We are of the view that the words 'such cloth or yarn' would mean the cloth or yarn manufactured in U.P. and sold. It has nothing to do with the transformation by printing and designs on the cloth. The cloth exported is the same as the cloth sold with this variation or difference that the colour has changed by printing and processing. In the view which we take that the cloth exported is the same as the cloth sold by the petitioners, there can be no question about the exemption clause not applying to it and if the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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