TMI Blog2009 (5) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... extracted from G.S.T.R. No. 54 of 2005. Vide order dated November 7, 2005 of the Chairman, Haryana Tax Tribunal, Chandigarh, the following question of law was referred under section 42 of the Haryana General Sales Tax Act, 1973 (hereinafter referred to as, the Act ), for determination of this court: Whether on a true and correct interpretation of entry No. 14 of Schedule B appended to the State Act, could it be held that 'labels' are textiles and covered under the said entry? The facts required to be noticed for the disposal of this reference are that the assessee is engaged in the business of manufacturing and trading of labels which are manufactured out of different types of yarns and are sold in rolls to manufacturers of garments who use the same after cutting them into pieces according to their requirement. The Excise and Taxation Officer-cum-Assessing Authority framed the assessment of the dealer for the year 2008-09 and allowed the sale of labels as tax-free falling under entry 14 of Schedule B to the Act. The aforesaid case was taken up for revision by the revisional authority, Jhajjar under section 40 of the Act and it was held by him that the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterpreting the entries in the Schedule is as to how the item is known in common parlance. According to her, the item labels is called labels and not fabrics of textiles and as such, this item is not covered under entry 14 of Schedule B to the Act. In support of her contention, she has placed reliance on two judgments of the Andhra Pradesh High Court rendered in the cases of Bharat Litho Press v. State of Andhra Pradesh [1987] 67 STC 53 and Chandamama Printing Press Hyderabad Pvt. Ltd. v. State of Andhra Pradesh [1988] 71 STC 92 (AP). Per contra, learned counsel appearing for the respondent-assessee has assiduously argued that the Tribunal was right in holding that the labels which are sold by it without cutting and in full rolls, are textiles and thus covered under entry 14 of Schedule B to the Act. The learned counsel has further contended that various dictionaries have defined the term textile to be something which is woven. According to him, any kind of woven fabric would fulfil the requirements of being a textile and cannot be excluded from the entry merely because it has been used in a particular trade. In support of his contention, the learned counsel has placed relianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiles? The answer to the question depends on what is the true meaning of the word 'textiles' as used in item 30 of the Schedule B. . . . There can, therefore, be no doubt that the word 'textiles' in item 30 of Schedule B must be interpreted according to its popular sense, meaning 'that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it'. There we are in complete agreement with the judges who held in favour of the Revenue and against the assessee. But the question is: What result does the application of this test yield? Are 'dryer felts' not 'textiles' within the ordinary accepted meaning of that word? The word 'textiles' is derived from the Latin 'texere', which means 'to weave' and it means any woven fabric. When yarn, whether cotton, silk, woollen, rayon, nylon or of any other description or made out of any other material is woven into a fabric, what comes into being as a 'textile' and it is known as such. It may be cotton textile, silk textile, woollen textile, rayon textile, nylon textile or any other kind of textile. The method of weaving a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded to apply to imports made by the trading community clearly shows that 'dryer felts' which are 'woven textile felts . . . of a kind commonly used in paper-making machinery' are regarded in common parlance, according to the sense of ordinary traders and merchants, textile fabrics. We have, therefore, no doubt that 'dryer felts' are 'textiles' within the meaning of that expression in item 30 of Schedule B. In Delhi Cloth General Mills' case [1980] 46 STC 256 (SC), it has been held as under (at pages 259-261): What is a fabric? The 'Mercury' Dictionary of textile terms defines 'fabrics' as a term which covers 'all textiles no matter how constructed, how manufactured, or the nature of the material from which made', and the expression 'textile' is described as 'any product manufactured from fibres through testing, interlacing, bonding, looping, or any other means, in such a manner that the flexibility, strength, and other characteristics properties of the individual fibres are not suppressed'. The man-made textile Encyclopedia 1959 defines fabric as 'a collective term applied to cloth no matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t does not fall in that category. It is a woven fabric in which the intermediate process of weaving the weft threat across the wrap cord is an integral stage of manufacture. When the purchaser buys the product, it is the entire integrated woven fabric which he buys, it is not merely the tyre cord by itself. If tyre cord was all that he desired, he would purchase that commodity, which is readily available, and not tyre cord fabric. We may also point out that item 22 of the First Schedule to the Central Excises and Salt Act speaks of 'all varieties of fabrics', language wide enough to include the rayon tyre cord fabric manufactured by the appellant. In the case of Palco Lining Company's case [1983] 54 STC 255 (All), it has been observed as under (at page 261 of STC): (1) The word 'cotton fabric' has not been defined in the notification but the meaning is obvious. It must be a fabric made of cotton and further it must answer the description of textile. So far as the buckram cloth and the other cloth that is used for manufacturing the collars (1)This quotation is from the judgment in Omvik Electronic Private Ltd. v. Commissioner of Sales Tax [1983] 54 STC 255 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, on the same analogy, buckram collars which serve as a lining in the collars of ready-made shirts, must be held to be 'cotton fabric'. In Suganchand Basantlal Singhania's case [1996] 103 STC 392 (MP) it was observed as under (at page 394): 19. Cotton fabrics. 'Cotton fabrics' means all varieties of fabrics manufactured either wholly or partly from cotton and includes dhotis, sarees, chaddars, bed sheets, bed spreads, counterpanes, table clothes, embroidery in the piece, in strips or in motifs, fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic material, and fabrics covered partially or fully with textile flocks or with preparations containing textile flocks, if (i) in such fabrics cotton predominates in weight, or (ii) such fabrics contain more than 40 per cent by weight of cotton and 50 per cent or more by weight or non-cellulosic fibres or yarn or both. . . Niwar and dari both are prepared after weaving cotton fabrics. Therefore, simply because they have not been mentioned specifically by name, would not mean that both these items will not be covered by this entry. In fact, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items mentioned in the entry themselves point to this meaning. Tapes made as a result of weaving would clearly be within the entry. But, would it be so if the normal pattern of producing textile by using the warp and woof pattern of thread is not applied? In our view, that will not be conclusive. We are inclined to think that weaving is not necessarily limited to that type of weaving. In modern advancement of textile technology, it is now possible, without using the warp and the woof pattern to produce tape, by holding the threads together lengthwise by using gum. To a causal look, the product resembles a tape which has been woven in the normal sense on the loom. But it is not the appearance alone, but what is necessary for weaving is that threads are bound together in order to produce a pattern of fabric or tape. In Radhika's case [1977] 39 STC 93 (Orissa), their Lordships of the Orissa High Court have observed as under (at page 94): 3 The entry in question reads thus: 'All mill made fabrics made wholly or partly of cotton, staple fibre, rayon, artificial silk or wool including processed fabrics, made in the processing mills.' The learned standing counsel do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her hand, in case such cutting into shorter lengths and stitching of the two ends are accessory to and, therefore, part of the process of manufacturing such bed sheets, bed spreads, chadars, etc., cutting and stitching cannot result in putting the finished articles beyond the scope of entry No. 19. In my view, the materials on record do not indicate that in the instant case, by executing works of cutting into shorter lengths and stitching the bed-spreads, bed-sheets, towels, etc., cease to be cotton fabrics. On the other hand, the same continued to be cotton fabrics in their natural and accepted meaning. Such cutting and stitching were really part of the process of manufacturing bed-spreads, bed-sheets, etc. To the same effect is the judgment of this court delivered by a Division Bench of this court in Raj Paul and Brothers v. State of Punjab [2009] 23 VST 389 (G.S.T.R. Nos. 65 to 67 of 1991 vide order dated January 19, 2009), wherein it was held that handkerchiefs fall under item 30 of Schedule A to the Punjab General Sales Tax Act, 1948 which is similar to entry 14 of Schedule B to the Act. The same reads as under (at page 392 of VST): But the question then is whether it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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