FILTERCO & ANR versus COMMSSIONER OF SALES TAX, MADHYA PRADESH AND ANR.

Citation: [1986] 1 S.C.R. 239 · Decided: 11-02-1986 · Supreme Court of India · Bench: O. CHINNAPPA REDDY · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

Fil.Tl!RCO & AHR, 
v. 
<DllISSIOllEB. OF SALES 
TAX, 
llAIBYA PRAlESB AND AHR. 
FEBRUARY 11, 1986, 
239 
[O, CHINNAPPA REDDY, E.S, VENKATARAMIAH, V, BALAKRISHNA 
ERADI, R.B. MISRA AND V. KHALID, JJ,] 
Constitution of India - Article 226 and 227 whether the 
High Court can dismiss a petition in limine on the plea of the 
existence of an alternate remedy open to the petitioner -
Construction of a taxing statute - The Madhya Pradesh General 
Sales Tax Act, 1958 -
Exemption under section 10 - Whether 
"Coqiressed Woollen Felts" constitute "cloth" so as to fall 
within the scope of Entry 6 of Schedule I of the 1958 Act -
Principle of equitable Estoppel, applicability of -
Opinion 
given earlier on the basis of only one specimen of the felt 
that it is "cloth" (when in fact the assessee manufactures 26 
varieties) and non recovery of tax on that score for twelve 
Years - Principle cannot be attracted • 
. The appellants M/s, Filterco manufactures COllPressed 
felt by subjecting the Compressed Woollen fibres to heat and 
miature. On March 25, 1971 they addressed a c01lllllllication to 
the Comdsaioner of Sales Tax forwarding a specimen of the 
felt manufactured in their factory and requesting that the 
•- u:y be treated as exempt froa tax under Entry 6 of Sche-
dule I to the Madhya Pradesh General Sales Tax Act, 1958. This 
request was acceded to through the Commissioner's letter dated 
7.8.1971. On the basis of the said letter the turnover of the 
company pertaining to the sales of compressed woollen felt' was 
llOt subjected to tax during the period from 1971 to 1982, 
However, by a letter dated 4,3, 1982 the Counissiouer of Sales 
Tax informed the appellants that "in view of the judgment of 
the Supreme Court in the case of M/s. Gujarat Woollen Mills, 
(A.I.R, 1977-1548 S.C.) that compressed woollen felts are not 
"woollen fabrics", its earlier opinion dt. 7 .8. 71 to the 
contrary that the Compressed Woollen Felt manufactured by 
appellant will be exempt under Entry 6 of Schedule I of the 
Salee Tax Act, 1958 be treated as cancelled. Aggrieved by the 
A 
B 
c 
D 
E 
F 
G 
H 
A 
B 
c 
D 
E 
F 
G 
H 
240 
SUPRl!ME COURT REPORTS 
[19861 1 s.c.R. 
rerlaed stand taken by the Comissioner of Sales Tax, the 
appellants filed an application before the Comiasioner of 
Sales Tax under section 42B of the Act for a detel'lliliation of 
the question of taubility of the goods in question by produc-
ing as many as 26 suples of felt of varying hardness, density 
and. thickness alongwith a statement showing details of each 
suple. lbe Coaaiasioner of Sales Tax was of the view that 
though the expression "cloth" will take in non-woven material 
inclusive of "felt", pliability is an essential attribute of 
"cloth" and only those varieties of felt 111111ufactured by the 
appellants which satisfy the test of pliability can be legiti-
mately clasaified as "cloth" and applying the said test, by 
his order dated 25.1. 83, held that only 5 out of the 26 speci-
mens produced by the appellants namely, those 111arked by the 
Comissioner as A-1, A-2, A-3, A-4 and A-19 could be classi-
fied as "cloth" and granted exemption froa tax under Entry 6 
of Schedule I of the Act. The remaining 21 samples attracted 
tax liability at the rate of ten per cent. 
The appellants filed a ,Writ Petition in the High Court 
of Madhya Pradesh challenging the aforesaid order but the High 
Court dismissed .the Writ Petition without entering into merits 
by observing that there was an alternate remedy available to 
the petitioners under the Act. Hence the appeal by special 
leave. 
Dismissing the appeal, the Court, 
lllW> : 1. A summary dismissal of the Writ Petition on 
the specious plea of availability of alternate remedy without 
con11idering and pronouncing upon the merits of the contentions 
raised by the parties, in this case, is not· justified, in as 
mch as (a) the order passed by the Connisaioner of Sales Tax 
was clearly binding on the assessing authority under section 
42B(2); (b) although technically it llOuld have been open to 
the appellant• to urge their contentions before the appellate 
authority, that would 1>e a mere exercise in futility When a 
superior officer namely, the Comissioner, has already passed 
a well considered order in the exercise of his statutory 
jurisdiction under sub-section (1) of section 42-B of the Act 
holding that 21 varieties of the C011Preased woollen felt manu-
factured by the appellants .are not eligible for exemption 
under E

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