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TMI Blog2009 (5) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 of labels worth Rs. 1,23,05,433 is taxable and created an additional demand of Rs. 12,30,543 vide his order dated July 28, 2003. Feeling dissatisfied, an appeal was filed by the assessee before the Haryana Tax Tribunal, Chandigarh under section 39 of the Act. Appeal was initially taken up by a Bench consisting of the Chairman, Mr. M.L. Singhal (Retd.) and Shri B.S. Suhag, Member. Both of them delivered separate judgments dated June 1, 2004 and November 25, 2004, respectively. Whereas the Chairman had held that the goods are taxable as those are not falling under entry 14 of Schedule B, the Member has held that the goods are tax-free being a Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 reliance on a catena of judgments rendered by various courts. The learned counsel has further drawn our attention to the fact that yarn whether cotton silk, woollen, rayon, nylon or of any description are made out of any other material is woven into a fabric what comes into being is textile and it is known as such. The method of weaving adopted may be warp and woof or any other technique. The learned counsel has further drawn our attention to Chapter 58 of the Central Excise Tariff Act and item in question which falls at entry Heading 58.07 which reads as under: The learned counsel for the respondent has laid much stress on the point that the item labels/label st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin 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 adopted may be the wrap and woof pattern as is generally the case in most of the textiles, or it may be any other process or technique. There is such phenomenal advance in science and technology, so wondrous is the variety of fabrics manufactured from materials hitherto unknown or unthought of and so many are the new techniques invested for making fabric out of yarn that it would be most unwise to confine the weaving process to the wrap or woof pattern. Whatever be the mode of weaving employed, woven fabric would be 'textiles'. What is necessary is no more than weaving of yarn and weaving would mean binding or putting together by some process so as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vers '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 how constructed or manufactured and regardless of the kind of fibre from which made. In structure it is planar produced by interlacing yarns, fibres or filaments. Textile fabrics include the following varieties, bonding, felted, knitted, braided and woven'. The Fairchild's Dictionary of Textiles 1959 says that fabric is 'a cloth that is woven or knit, braided, netted, with any textile fibre. . .', and 'textile' is said to refer to 'a broad classification of any material that can be worked into fabric, such as fibres and yarns including woven and knitted fabric, felt, netted fabric, lace and crouched goods'. In 'Textile Terms and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alco 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 (All) at page 260 which has been referred to in Palco Lining Company v. Sales Tax Officer [1983] 54 STC 255 (All).-Ed. and the shoulder straps is concerned, that is, undoubtedly a textile and a cotton fabric. In the case of Porritts & Spencer (Asia) Ltd. v. State of Haryana [1978] 42 STC 433 (SC); [1979] UPTC 866 (SC), their Lordships have held that the word 'textile' means any woven fabric and 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 is a textile and is known as such. The method of weaving adopted may be the wrap and woof pattern or it may be any o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th 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 items which have been mentioned in this entry are illustrative only and not exhaustive. Similarly because certain items have been mentioned would not mean that the entry should be confined to those items only. These are all illustrative and not exhaustive. Therefore, the contention of the learned counsel that simply because niwar and dari have not been mentioned, that would not be exhaustive in itself. The items which have been mentioned are only illustrative. Therefore, it cannot be treated that the list is exhaustive. The definition of 'cotton fabric' is too wide and it would mean that all varieties of items manufactured wholly or partly from cotton fabric would fall in this entry an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 does not dispute the fact that mill-made cloth is exempt from tax. The contention, however, is that even if manufactured by mills, the four commodities referred to here are not mill-made cloth simpliciter but have been otherwise processed and become different commodities which would not be covered by the entry. We agree with the submission of the learned standing counsel that if mill-made cloth is converted into a different item of goods, the exemption would not extend to such goods. The question, however, is whether bed sheets and towels are different marketable commodities than mill-made cloth. So far as bed sheets are concerned, mill-made cloth is cut into pieces and the two ends are said to be stitched. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 would include handkerchiefs because handkerchiefs are not subjected to any knitting and embroidery. As already observed, handkerchiefs are hemmed and, therefore, it may fall within the meaning of 'cotton, woollen or silken textiles on which knitting and embroidery work has been done'. However, the question directly fell for consideration before the Division Bench of the Kerala High Court in Deputy Commissioner of Sales Tax (Law) v. M.M. Mohammed Abdul Khader [1980] 46 STC 512. The facts in that case are akin to the facts of the case in hand. The assessee in both the cases have purchased excise-duty-paid handkerchief from the mill and without subjecting those to any process sold it in the market. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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