LexSALES TAX COMMISSIONER, U. P. versus M/S. LADHA SINGH MAL SINGH
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SALES TAX COMMISSIONER, U. P.
v.
M/S. LADHA SINGH MAL SINGH
July 27, 1971
(K. S. HEGDE AND A. N. GROVER, JJ.J
U.P. Sales Tax Act, 1948-Noti{ication dated June
19, 1948-Cloth
manufactured by looms worked by power-If cloth
manufactured
by
Mills.
Under the notification dated June 19, 1948 issued under s. 3(A) of the
U.P. Sales Tax Act, 1948, sales tax at the rate of 6 pies in a rupee was
941
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payable on "cloth manufactured by mills". Tax at that rate was sought
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to be Jevied on cloth manufactured by means of looms worked by power
on the basis that it was "cloth manufactured by mills" within the meaning
of the notification. The High Court held that cloth manufactured by power
looms could not fall under the term "cloth manufactured by mills". Dis-
missing the appeal,
HELD: What has to be seen is the context in which the word "mill"
is used in the notification. The notification divides cloth broadly into two
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categories-mill made and loom made.
Loom made cloth would include
all cloth manufactured on looms and, therefore, whether the energy is
supplied manually or by power cannot convert the essential character
of the cloth, namely, its manufacture on looms.
As regards mill made
cloth the actual process of weaving is more or less automatic, pre-conceiv-
ed and definite and it involves functioning of machinery. In popular lan-
guage a power loom cloth is never associated with a mill cloth. [942H·
943A]
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Further, it -:annot be said that once the looms worked by power are
used in a building the essential characteristics of mills would be satisfied.
To hold so would be contrary to the accepted and popular meaning of
hand-loom or power-loom cloth and mill-made cloth. The distinction
which v;as kept in view when the notification was promulgated was between
the aforesaid two categories or types of cloth involving essentially a differ-
ence in the process in which it was manufactured. [943H-944B]
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Sri Dhandapani Power Loom Factory,
Erode. v. Commercial
Tax
Officer, Coimbatore & Anr., 12 S.T.C. 304 and El/erker v.
Union Cold
Storage Co. Ltd., [1939] I A.E.L.R. 23, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
564 of 1967.
Appeal by special leave from the judgment and order dated
Aueust 9, 1966 of the Allahabad High Court in S.T.R. No. 563
of l962.
0. P. Rana, for the appellant.
The respondent did not appear.
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The Judgment of the Court was delivered by
H
Grover, J.-The only point for decision in this appeal by
special leave is whether the cloth manufactured by means of
942
SUPREME COUllT RBPORTS
[1971) SUPP. S.C.R.
A
B
c
D
E
F
G
H
looms worked by power can be regarded as "cloth manufactured
by mills" for which sales tax was payable at the rate of 6 pies in
a rupee in terms of the notification dated June 8, 1948 issued
under s. 3A of the U.P. Sales Tax Act, 1948. The general rate
of tax on sale of cloth otherwise was 3 pies per rupee. The High
. Court on a reference made under the relevant provisions of the
Act held that cloth manufactured by means of power looms could
not fall under the term "cloth manufactured by the mills".
The approach of the High Court was that since the word
"mills" had not been defined either by the Act or by the notifica·
tion mentioned before the meaning of the words "cloth manufac·
tured by the mills" must be considered according to the common
understanding of mankind. Reference was made to the dictionary
meaning as given in Websters' New International Dictionary,
Vol. 2.
According to the dictionary two things were required
(1) a building and (2) a machinery, in order to constitute a "mill".
The meaning of the word "machine", according to the dictionary
in a popular and mechanical sense is ".... .. .. .. .. .. . more or less
complex combination of mechanical parts, as levers, gears spro·
cket wheels, pulleys, shafts and spindles, ropes, chains, and bands,
cams and other turning and sliding pieces, springs, confined fluids
etc., together with the frame work and fastenings, supporting and
connecting them, as when it is designed to operate upon material
to change it in some pre-conceived and definite manner ......... "
According to the High Court looms which are merely worked by
power would hardly fall within the meaning of the word "ma·
chine". It has been pointed out that looms worked by hand or
by power have not been shown by any evidence to be different.
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