LexCOMMISSIONER OF SALES TAX, U.P. versus M/S. SARIN TEXTILES MILLS
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
r 228 A B D E F COMMISSIONER OF SALES TAX, li.P. v. M/S. SARIN TEXTILES MILLS April 21, 1975 (R. S. SARKARlA AND A. C. GUPTA, JJ.J U.P. Sales Tax Act, 1948, ss. 3 ilnd 3A-'Wool/cn Carpet Yarn' if un.\pun frbrc used in wearing. The respondent is a manufacturer of and dealer in '\Voollen Carpet Yarn', popularly known as kati. For the assesSmenl years 1959-60 and 1961-62 he was taxed by the Sales Tax officer at 6 pies per rupee nnd 3 pies per rupee, respectivcJy, under two notifications applicable to the. two assessment years respectively, issued under the U.P. Sales Tax Act, 1948. On appeal, the Assis- tant Commissioner held that kati \Vas an unclrissified item tuxable at 2 pies per n1pce under s. 3 of the Act, and the order \\'as confirn1ed on reYision and by the High Cou:t on reference. The two Notifications provided (1) that turnover of 'Yarn· of all kinds including unspun fibre used in weaving' is liable to tax at 6 pies per tu>lee, and (2) turnover of yarn of all kinds -including unspun fibre used in weaving, is liable to tax at 3 pies per rupee. There was another notification \Vhich pro- vided that turnover of "Woollen goods excluding carpet but including knitting wool'' is liable to tax at one anna per rupee .. The authorities under the Act found· that kati are short cut pieces of un- spun fibre about 2 inches in length ; !hat the pieces have \•cry little tensile strength and are not used, and are not caP'abJe of being used, for w·eaving, knit- ting or rope-making ; that the only use to which kati is put is by attaching each piece by hand around hvo warp threads; that it is not a component of the basic fabric of the carpet ; that it is not an integral constituent of the warp and weft of tbe carpet which cono;ists of a different spun fibre of great tensile strength ; and that the process of looping or knotting kati is different and _dist;inct from the pro· cess of lengthwise and cross~v.'ise combining of \\'arp and weft components \Vhich makes the woven basic structure of the carpet. Dismissing the appeal to this Court. " H'ELD : (I) Kati is not 'yam' because one of the characteristics of yarn ~ is that it should be spun thread, \Vhereas kati is unspun fibre. [231·H] G (2) It is not unspu1i fibre 11SL'd in weaving v."ithin the n1erining of the first two notificacions because, on the facts found, it is not used in wea\'ing. lI (233-1;'-DJ (3) ]t is not ''voollen gocds' within the n1eaning of the 3rd notification, because. [233-C-DJ (a.) Katri is on1y niw material from ¥.'hich 'woollen goods' are prepared : and [233-E] '(b) Yarn .use~ in \\'Caving the .'van? and weft of carpets, or woollen fibre used in \Veav1ng 1s, under the not1ficattons, taxa~le at a par lower rate than 'woollen goods': and it could never have been 1ntende~ that a mere compo- nent or raw material, used by a manual process, not being a process. of \Vcav- ing in the manufacture of 'woollen goods' should be taxed at a higher rate treatlng kati as fi~ished 'v.'oollen goods'. [233·E.F.] ' C.S.T • . v. SARIN TEXTILES (Sarkaria, J.) 229 ( 4) Therefore, it is an unclassified item and the turn-over is liable to tax A only at 2 pies per nipee. CIVIL APPELIATE JURISDICTION : Civil Appeal Nos. 1934-35 of 1970 and 1172-73 of 1974. Appeal by Special Leave from the Judgment and Order dated the · B 30-4-1970 for the Allahabad High Court in S. T. R. No. 191 of 1969. 0. P. Rana for the appellant. S. C. Manchanda and P. C. Kapoor for the respondent. The Judgment of the Court was delivered by . SARKARIA, J.~Thesc appeals by special leave are directed.' against the judgment of the High Court of Allahabad answering in favour of the assessee the following question referred to it under s. 11 of tlie U.P. Sales Tax Aot, 1948 (for short called the Act): "Whether the articles "carpet woollen Yarn" is cover- ed by the term 'yarn' mentioned. in item No. 4 of notifica- tion No. ST-907/X, dated 31-3-1956 and item No. 33 of notification No. S.T. 1365/X dated 1-4-1960 ·taxable at 6 pies and 3 pies per cent respectively or a kind of woollen goods as mentioned at item No. 46 taxable "at one amp per rupee according to notification No. ST-905/X dated 31-3-56 or whether it is an unclassified item taxable at 2%". M/s. Sarin Textile Mills, Agra is a manufacturer of and dealer c D E F in "woollen carpet yam", popularly known as "kati". The relevant assessment years are 1959-1960 and 1961-62. Th
Excerpt shown. Read the full judgment & AI analysis in Lexace.