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Montex Glass Fibre Industries (P) Ltd. v/s Commissioner of Sales Tax


Company & Directors' Information:- K S GLASS INDUSTRIES PRIVATE LIMITED [Active] CIN = U26100GJ2010PTC062375

Company & Directors' Information:- S S S FIBRE LIMITED [Active] CIN = U17110PB2005PLC027818

Company & Directors' Information:- MONTEX GLASS FIBRE INDUSTRIES PRIVATE LIMITED [Active] CIN = U26109MH1976PTC018819

Company & Directors' Information:- F M GLASS INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1991PTC045350

Company & Directors' Information:- J K S FIBRE GLASS PVT LTD [Strike Off] CIN = U26109WB1993PTC059966

Company & Directors' Information:- K J GLASS INDUSTRIES PRIVATE LIMITED [Active] CIN = U26960MH2011PTC212552

Company & Directors' Information:- M S GLASS INDUSTRIES LIMITED [Under Liquidation] CIN = U27203WB2008PLC125907

Company & Directors' Information:- B D J GLASS INDUSTRIES PVT LTD [Active] CIN = U26101WB1991PTC052005

Company & Directors' Information:- J G GLASS INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U99999MH1963PTC012627

Company & Directors' Information:- O K GLASS FIBRE PRIVATE LIMITED [Active] CIN = U26102MH1995PTC095571

Company & Directors' Information:- G L FIBRE PRIVATE LIMITED [Strike Off] CIN = U17112PB2010PTC033873

Company & Directors' Information:- S K GLASS INDUSTRIES PRIVATE LTD [Strike Off] CIN = U26101DL1981PTC012407

Company & Directors' Information:- SALES & INDUSTRIES PVT LTD [Strike Off] CIN = U51909WB1952PTC020422

Company & Directors' Information:- INDIA FIBRE PVT LTD [Active] CIN = U17232WB1968PTC027401

Company & Directors' Information:- S M GLASS INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U74900PN2013PTC146888

    S.T.R.No.12 of 1985

    Decided On, 11 January 1995

    At, High Court of Judicature at Bombay

    By, THE HONOURABLE DR. JUSTICE R.P. SARAF & THE HONOURABLE MR. JUSTICE D.K. TRIVEDI

    For the Appearing Parties: ----



Judgment Text

1. By this reference under S.61(1) of the Bombay Sales Tax Act, 1959, the Maharashtra Sales Tax Tribunal, Bombay, has referred the following question of law to this Court for opinion at the instance of the assessee :

"Whether, on true interpretation of item 22 in the Central Excise Tariff and entry 12 in Schedule A to the Bombay Sales Tax Act, 1959, the Tribunal was correct in law to hold that fibre glass fabrics and fibre glass sleevings (unvarnished) sold by the applicants were covered by entry 102 in Schedule C, Part II to the Bombay Sales Tax Act, 1959 and not entry 12 in Schedule A to the said Act, as in force since July 1, 1981."

2. The assessee is a manufacturer and dealer in fibre glass cloth, fibre glass tapes, and fibre glass sleevings of various sizes and thickness. On December 28, 1981, the assessee made an application to the Commissioner of Taxes, Maharashtra State, Bombay, under S.52(1)(e) of the Bombay Sales Tax Act, 1959 ("the Act") seeking determination of the question whether any tax was payable under the Act in respect of sales of fibre glass cloth and fibre glass sleevings by the assessee. According to the assessee, no tax was payable in respect of the sales thereof as they were man-made fabrics failing under entry 12 of Schedule A to the Act. In support of this contention, the assessee relied upon the definition of "man - made fabrics" in the First Schedule to the Central Excises and Salt Act, 1944 ("the Central Excise Act"). Though the Commissioner accepted the contention of the assessee that the goods sold by it were man - made fabrics, he rejected the claim of the assessee that these items were covered by entry 12 of Schedule A to the Act. The Commissioner did so because of Explanation II to item 22 of the First Schedule to the Central Excise Act which says that "man-made fabrics" in item 22 would not include "glass fibres or fabrics falling under item No. 19 or item No. 21" of the said Schedule. The Commissioner, therefore, held that glass fabrics, fibre glass cloth and fibre glass tapes did not fall within the meaning of man-made fabrics under entry 12 of Schedule A to the Act and hence sales thereof would be taxable as sales of goods covered by the residuary entry 102 of Part II of Schedule C to the Act. The assessee appealed to the Maharashtra Sales Tax Tribunal ("the Tribunal") against the above order of the Commissioner which was dismissed by the Tribunal. Hence this reference.

3. The question that arises for our determination is whether "fibre glass fabrics" and "fibre glass sleeving (unvarnished)" are covered by entry 12 of Schedule A. If the answer is in the affirmative, the sales of these items by the assessee would be exempt from tax, otherwise they would be regarded as goods falling under the residuary entry 102 of Part II of Schedule C to the Act and sales thereof would be taxable at the rates applicable to sales of such goods, which at the material time was 8 paise in the rupee.

Schedule A to the Bombay Sales Tax Act (as substituted by Maharashtra Act 32 of 1981 with effect from July 1, 1981) contains the list of goods, the sale or purchase of which is free from all taxes. Entry 12 thereof, as it stood at the material time, reads :

------------------------------------------------------------------------

Serial No. Description of goods

------------------------------------------------------------------------

(1) (2)

------------------------------------------------------------------------

12 (i) Cotton fabrics

(ii) Man-made fabrics

(iii) Woollen fabrics

(iv) Sugar, and

(v) Tobacco

as defined from time to time in the First Schedule to the Central

Excises and Salt Act, 1944.

------------------------------------------------------------------------

We are concerned in this case with "man-made fabrics" because the case of the assessee is that fibre glass fabrics and fibre glass sleevings are man-made fabrics within the meaning of item (ii) of the above entry.

From a plain reading of the above entry, it is clear that only "man-made fabrics" as defined in the First Schedule to the Central Excise Act would fall under that entry. "Man-made fabrics" has been defined in item 22 of the First Schedule to the Central Excise Act. This item, at the material time, so far as relevant, read :

------------------------------------------------------------------------

Item Tariff description Rate of duty

No. -----------------------------

No. Basic Additional Handloom

duty duty cess

(1) (2) (3) (4) (5)

------------------------------------------------------------------------

22 Man-made fabrics - "Man-made

fabrics" means all varieties of

fabrics manufactured either wholly

or partly from man-made fibres or

yarn and includes embroidery in

the piece, in strips, or in motifs,

and fabrics impregnated, coated

or laminated with preparations

of cellulose derivatives or of

other artificial plastic materials

and fabrics covered partially or

fully with textile flocks or with

preparations containing textile

flocks, in each of which man-made

(i) cellulosic fibre or yarn, or

(ii) non cellulosic fibre or yarn,

predominates in weight;

..........

Explanation II. - This item does not include glass fabrics or fabrics falling under item No. 19 or item No. 21.

It is evident from the above definition of "man-made fabrics" that it does not include "glass fabrics". In view of the above, in our opinion, there is no basis whatsoever for the contention of the assessee that "man-made fabric" in entry 12 of Schedule A to the Act includes "glass fabric". "Glass fabric", therefore, cannot be regarded as "man-made fabrics" falling under entry 12 of Schedule A to the Bombay Sales Tax Act.

4. We are, therefore, of the clear opinion that on true interpretation

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of entry 12 of Schedule A to the Bombay Sales Tax Act read with item 22 of the First Schedule to the Central Excises and Salt Act, the Tribunal was correct in holding that the fibre glass fabrics and fibre glass sleeving did not fall under entry 12 of Schedule A to the Bombay Sales Tax Act (as in force since July 1, 1981). These items would therefore fall under the residuary entry 102 of Part II of Schedule C to the Act. 5. In the premises, the above question referred to us is answered in the affirmative and in favour of the Revenue. 6. In the facts and the circumstances of the case, we make no order as to costs. 7. Reference answered in the affirmative.
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