Allahabad High Court
M/S Two Brothers Filaments Ltd. Thru' ... vs Commissioner Trade Tax, U.P. Lucknow on 31 October, 2018
Author: Ashok Kumar
Bench: Ashok Kumar
HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Reserved on 02.08.2018 Delivered on 31.10.2018 Court No. - 29 Case :- SALES/TRADE TAX REVISION No. - 790 of 2007 Applicant :- M/S Two Brothers Filaments Ltd. Thru' Authorised Signatory Opposite Party :- Commissioner Trade Tax, U.P. Lucknow Counsel for Applicant :- Anoop Trivedi,Nishant Mishra Counsel for Opposite Party :- S.C. And Case :- SALES/TRADE TAX REVISION No. - 787 of 2007 Applicant :- M/S Two Brothers Filaments Ltd. Thru' Authorised Signatory Opposite Party :- Commissioner Trade Tax, U.P. Lucknow Counsel for Applicant :- Anoop Trivedi,Nishant Mishra Counsel for Opposite Party :- S.C. And Case :- SALES/TRADE TAX REVISION No. - 788 of 2007 Applicant :- M/S Two Brothers Filaments Ltd. Thru' Authorised Signatory Opposite Party :- Commissioner Trade Tax, U.P. Lucknow Counsel for Applicant :- Anoop Trivedi,Nishant Mishra Counsel for Opposite Party :- S.C. And Case :- SALES/TRADE TAX REVISION No. - 789 of 2007 Applicant :- M/S Two Brothers Filaments Ltd. Thru' Authorised Signatory Opposite Party :- Commissioner Trade Tax, U.P. Lucknow Counsel for Applicant :- Anoop Trivedi,Nishant Mishra Counsel for Opposite Party :- S.C. And Case :- SALES/TRADE TAX REVISION No. - 791 of 2007 Applicant :- M/S Two Brothers Filaments Ltd. Thru' Authorised Signatory Opposite Party :- Commissioner Trade Tax, U.P. Lucknow Counsel for Applicant :- Anoop Trivedi,Nishant Mishra Counsel for Opposite Party :- S.C. And Case :- SALES/TRADE TAX REVISION No. - 792 of 2007 Applicant :- M/S Two Brothers Filaments Ltd. Thru' Authorised Signatory Opposite Party :- Commissioner Trade Tax, U.P. Lucknow Counsel for Applicant :- Anoop Trivedi,Nishant Mishra Counsel for Opposite Party :- S.C. And Case :- SALES/TRADE TAX REVISION No. - 793 of 2007 Applicant :- M/S Two Brothers Filaments Ltd. Thru' Authorised Signatory Opposite Party :- Commissioner Trade Tax, U.P. Lucknow Counsel for Applicant :- Anoop Trivedi,Nishant Mishra Counsel for Opposite Party :- S.C. And Case :- SALES/TRADE TAX REVISION No. - 794 of 2007 Applicant :- M/S Two Brothers Filaments Ltd. Thru' Authorised Signatory Opposite Party :- Commissioner Trade Tax, U.P. Lucknow Counsel for Applicant :- Anoop Trivedi,Nishant Mishra Counsel for Opposite Party :- S.C. Hon'ble Ashok Kumar,J.
These are eight trade tax revisions filed by the assessee M/s Two Brothers Filaments Ltd., herein referred as The Assessee, are arises out of a common judgment and order dated 21.09.2006 passed by Trade Tax Tribunal NOIDA Bench, NOIDA in Second Appeal Nos. 473 to 480 of 2006 for the assessment year 1998-99 to 2001-02 under the U.P. Trade Tax Act and under the Central Sales Tax Act.
Heard learned counsel for the revisionist, Sri Nishant Mishra assisted by Sri Vipin Kushwaha, Advocates and learned counsel for the Department Sri B.K. Pandey, Standing Counsel for the respondent-Commissioner of Trade Tax U.P. Since the controversy involved in all the above revision petitions are similar, therefore, all the revision petitions are decided by common judgment.
For consideration by this Court the revisionist has referred the following questions by stating that the same are questions of law which are to be decided by this Court.
In the revision petitions related to U.P. Trade Tax Act following questions are referred:-
"A. Whether the Tribunal was legally justified in holding the goods manufactured by the applicant is not a textile exempted under the Act by virtue of Notification No. 7038 dated 31.01.19985 but Tapes/Laces covered by Notification No. 2376 dated 23.11.1998 only the basis of common parlance meaning without even taking on record the opinion of the people who are conversant with it and dealing with the said goods?
B. Whether the Tribunal was legally justified in permitting the revenue to take different stands on the same issue in view of the full bench judgment of the Hon'ble Apex Court in the case of C.C.E. Mumbai Vs. M/s Amar Bitumen & Allied Products Pvt. Ltd. (supra)?
C. Whether the Trade Tax Tribunal was legally justified in taking a different view from that taken by the other co-ordinate bench in the applicants sister concern's case for the assessment year 1997-98 and deciding the appeal without referring the matter to the larger bench in view of the judgment of the Hon'ble Apex Court in the case of Union of India Vs. Paras Laminates (P) Ltd. (supra) and this Hon'ble Court judgment in the case of New Okhla Industrial Development Authority vs. C.T.T. (supra)?
D. Whether the Tribunal was legally justified in deciding the classification issue only on the basis common parlance meaning when cotton fabrics has been defined under the Central Sales Tax Act in view of the judgment of the Hon'ble Apex Court in the case of Indo International Industrial vs. Sales Tax Commissioner, U.P.?
E. Whether in the facts and circumstances of the case, the Tribunal was legally justified in confirming the rejection of account books as well as the enhancement of turnover on the basis of the survey report dated 10.03.1998, which does not contains any evidence of suppression of turnover etc. as admitted by the assessing authority in the assessment order for the year 1997-98?"
Under the Central Sales Tax Act, the revisionist has referred the following questions:-
"A. Whether the Tribunal was legally justified in holding the goods manufactured by the applicant is not a textile exempted under the Act by virtue of Notification No. 7038 dated 31.01.1985 but Tapes/Laces covered by Notification No. 2376 dated 23.11.1998 only on the basis of common parlance meaning without even taking on record the opinion of the people who are conversant with it and dealing with the said goods?
B. Whether the Tribunal was legally justified in permitting the revenue to take different stands on the same issue in view of the full Bench judgment of the Hon'ble Apex Court in the case of C.C.E. Mumbai Vs. M/s Amar Bitumen & Allied Products Pvt. Ltd. (supra)?
C. Whether the Trade Tax Tribunal was legally justified in taking a different view from that taken by the other coordinate Bench in the applicants sister concern's case for the assessment year 1997-98 and deciding the appeal without referring the matter to the larger Bench in view of the judgment of the Hon'ble Apex Court in the case of Union of India Vs. Paras Laminates (P) Ltd. (supra) and this Hon'ble Court judgment in the case of New Okhla Industrial Development Authority Vs. C.T.T. (supra)?
D. Whether the Tribunal was legally justified in deciding the classification issue only on the basis common parlance meaning when cotton fabrics has been defined under the Central Sales Tax Act in view of the judgment of the Hon'ble Apex Court in the case of Indo International Industrial Vs. Sales Tax Commissioner, U.P.?
E. Whether the Tribunal was legally justified in rejection the applicant's claim of stock transfer without even examining each and every transaction in view of the Hon'ble Apex Court judgment in the case of M/s Tata Engineering & Locomotive Co. Ltd. Vs. Assistant Commissioner, Commercial Taxes (supra)?
F. Whether in the facts and circumstances of the case, the Tribunal was legally justified in confirming the rejection of account books as well as the enhancement of turnover on the basis of the survey report dated 10.03.1998, which does not contains any evidence of suppression of turnover etc. as admitted by the assessing authority in the assessment order for the year 1997-98?"
Brief facts of the case are that the revisionist-assessee was a limited company and was engaged in manufacturing and sale of 'Narrow Woven Fabrics' from its indigenously manufactured raw material, namely, Poly Propylene Multi Filaments Yarn, as well as the trading of PPMF Yarn. The revisionist asssessee was registered both under U.P. Trade Tax Act as well as under the Central Sales Tax Act. According to the revisionist the revisionist company was also registered under the provisions of Central Excise Act, as such was maintaining the regular books of account, so as prescribed under the provisions of Central Excise Tax Law and the Rules framed there under.
Learned counsel for the revisionist has submitted that under the Central Excise Act, the revisionist has discharged a duty of clearance of 'Narrow Woven Fabrics' in short 'NWF' under chapter heading 58.06.
Learned counsel for the revisionist has submitted that the revisionist had filed the returns under the provisions of U.P. Trade Tax Act and Central Sales Tax Act and has claimed exemption from payment of tax on the sale of 'NWF' under the entry no. 53 of Notification No. 7038 dated 31.01.1985, as amended by Notification No. 3714 dated 05.06.1985, by treating 'NWF' Covered by the expression 'Cotton Fabrics of all Varities'.
Survey were conducted by the SIB (Special Investigation Bureau) of the trade tax departmental authorities on the premises of the revisionist on 10.03.1998 and 13.03.2002 and at the time of survey certain documents were seized by the SIB Authorities.
The SIB Authorities prepared the survey report after considering the documents which are recovered from the premises of the revisionist and on the basis of the said SIB report the assessing authority has proceeded to pass the assessment orders both under the U.P. Trade Tax Act as well as under the Central Sales Tax Act by rejecting the books of accounts of the revisionist as well as the declared turnover.
The assessing authority has assessed the sale of 'NWF' to tax @ 2.5% while applying the Notification No. 1551 dated 26.05.1997 (effective till 01.12.1998) and thereafter under entry no. 45 of Notification No. 2376 dated 23.11.1998.
The revisionist has claimed certain stock transfer to its branch, which was situated at Delhi by saying that it is the stock transfer, therefore, is exempted from payment of tax, however, the said claim of the assessee was rejected by the assessing authority while passing the orders under Section 9(2) read with Section 30 of the Central Sales tax Act.
For the perusal, the extract of the above relevant notifications are necessary to be incorporated:-
"-: English translation of Vitta Bikri-kar Anubhag-2, Noti. No. S.T.-2-7038/X-7 (23)/83-U.P. Act XV-48-Order-85, dated 31st January, 1985, published in U.P. Gazette, Extraordinary, dated 31-1-1985.
(53) Textiles of the following varieties manufactured on powerloom, excluding durries, carpets, druggets, hosiery goods, ready-made garments, hessian or jute cloth and cotton, rayon or nylon, tyre cord fabrics, tyre cord or tyre cord warp sheets, and PVC/HDPE fabrics, but including the goods specified in Annexure hereunder:-
a. cotton fabrics of all varieties;
b. rayon or artificial silk fabrics, including staple fibre fabrics, of all varieties;
c. woollen fabrics of all varities;
d. fabrics made of a mixture of any two or more of the above fibres, viz. Cotton, rayon, artificial silk, staple fibre or wool;
e. Canvas cloth, tarpoulins and waterproof cloth.
-: English translation of Vitta (Bikri-kar) Anubhag-2, Noti. No. ST-II-3714//X-6(1)-85-U.P. Act-15/48-Order-85, dated June 5, 1985, published in U.P. Gazette Extraordinary, dated June 5, 1985.
(53). Textiles of the following varieties manufactured on powerloom, excluding durries, carpets, druggets, hosiery goods, readymade garments, hessian or jute cloth and cotton, rayon or nylon tyre cord fabrics, tyre cord or tyre cord warp sheets, PVC HDPE fabrics and cotton beltings, but including the goods specified in the Annexure hereunder:-
a. cotton fabrics of all varieties:
b. rayon or artificial silk fabrics, including staple fibre fabrics, of all varities;
c. woollen fabrics of all varieties:
d. fabrics made of a mixture of any two or more of the above fibres, viz. Cotton, rayon, artificial silk, staple fibre or wool;
e. Canvas cloth, tarpoulins and water-proof cloth.
-: English translation of Notification No. TT-2-1551/XI-9 (68)/97-U.P. Act-15-48-Order-97, dated May 26, 1997.
In exercise of the powers under the proviso to clause (e) of sub-Section (1) of Section 3-A of the Uttar Pradesh Trade Tax Act, 1948 (U.P. Act No. XV of 1948), read with Section 21 of the Uttar Pradesh General Clauses Act, 1904 (U.P. Act No. 1 of 1904), the Governor is pleased to make, with effect from the date of publication of thsi notification in the Gazette, the following amendment in Government Notification No. ST-2-5785/X-10 (1)/80-U.P. Act-15-48-Order-81, dated September 7,1981 as amended from time to time.
(50) Tapes and Niwar Sale to 2 Percent
(Excluding cotton niwar) Consumer
and laces including cord,
string or line used for trying
purposes or for drying clothes.
-: English Translation of Government Notificatin No. T.I.F.-2-2376/XI-9(251)/97-U.P. Act-15-48-Order-98, dated 23rd November, 1998.
(45) Tapes, Niwar (excluding Sale to 2.5% cotton niwar) and laces Consumer including cord, string or line used for trying purposes or for drying clothes.
Based on the survey report and the material available on record the assessing authority has proceeded to pass the assessment orders and has imposed the tax @ 2.5% on the purchases made by the revisionist by treating the same as purchases from unregistered dealers and accordingly estimated the same. The assessing authority has estimated the turnover of sales while passing the assessment orders treating the NWF sold by the revisionist as 'Tapes and Niwar' covered by notification no. 1551 dated 26.05.1997 and notification no. 2376 dated 23.11.1998 respectively.
Aggrieved by the assessment orders, the revisionist preferred the appeals before the First Appellate Authority, the Joint Commissioner (Appeals) 1st, Trade Tax, NOIDA.
The Joint Commissioner (Appeals) by his common order dated 23.05.2006 has rejected all the eight appeals, filed by the revisionist, by upholding the order of the assessing authority.
For the perusal, the relevant finding recorded by the First Appellate Authority are necessary to be placed:-
"अपीलकर्ता मल्टी यार्न से बनी हुई विभिन्न प्रकार की पट्टियाँ (निवाड़), बाँधने योग्य गोल रोल व चपटी टेप आदि वस्तुएँ बनाई हैं वह किसी भी प्रकार टैक्सटाइल की श्रेणी में नहीं आती हैं। इस संबन्ध में अपीलकर्ता की उपस्थिति में ही कर-निर्धारण अधिकारी ने नमूने भी प्रस्तुत किये जिनमे वस्तुओं के नाम 'टैग ओलोलीन निवाड़' भी लिखा था, जिनको देखने से उन्हें कपड़ा या टैक्सटाइल नहीं कहा जा सकता। जबकि उत्तर प्रदेश व्यापार कर अधिनियम के अंतर्गत केबल टैक्सटाईल विज्ञापित श्रेणी ही करमुक्त है। किसी वस्तु को फैब्रिक के रूप में सामान्य करमुक्ति नहीं दी गयी है। टेप की निवाड़ या लेसिज चाहे वे किसी भी प्रकार से बनी हों उन पर उत्तर प्रदेश व्यापार कर अधिनियम के अन्तर्गत कर देयता है। इस संबंध में यह भी उल्लेखनीय है कि बाजार में सामान्य बोल-चाल में तथा व्यापारिक जगत में एन0डब्ल्यू0एफ0 अथवा नैरोवूवन फैब्रिक के नाम से न तो कोई वस्तुएँ खरीदी जाती है और न ही बेची जाती हैं। व्यापारिक एवं कराधान प्रणाली में सामान्य बोलचाल और व्यापारिक जगत में प्रयोग होने वाला नाम अति महत्वपूर्ण है। माननीय सर्वोच्च न्यायालय ने सर्वश्री रामावतार बुद्धीप्रसाद बनाम असिस्टेंट सेल्स टैक्स आफिसर अकोला एवं अन्य 1961-एसटीसी-वाल्यूम-12 पेज-286 में इस बिन्दु पर विस्तार से विवेचन किया है कि किसी भी वस्तु की तकनीकी संरचना या बनावट से करदेयता न हो कर व्यापारिक जगत में जिस नाम से जाना जाता है उसी से करदेयता होगी। इसी प्रकार माननीय सर्वोच्च न्यायालय ने कलेक्टर आफ कस्टम बाम्बे बनाम सर्वश्री स्वास्तिक वूलन प्रा0लि0-1998-एआईआर-एससी-2176 में यह सिद्धान्त निर्धारित किया कि यदि किसी वस्तु की परिभाषा अधिनियम में नहीं है तो जो उन वस्तुओं में डील करते हैं व जिस प्रकार सि वस्तु को कहते हैं और बेचते हैं उसके अनुसार करदेयता होगी। इस प्रकार का निर्णय माननीय सर्वोच्च न्यायालय ने परिभाषा के अभाव में कामन पार्लेन्स अथवा कामर्शियल पार्लेन्स के अनुरुप वस्तु विचार करके करदेयता निर्धारित कर के सर्वश्री इंडो इंटरनेशनल इंडस्ट्रीज बनाम कमिश्नर, सेल्स टैक्स -1981-यूपीटीसी-481 का निर्णय दिया है। माननीय सर्वोच्च न्यायालय ने सर्वश्री पप्पू स्वीट एंड बिस्कुट बनाम आयुक्त व्यापारकर-1998-एनटीएन-वाल्यूम-13-पेज-721 के निर्णय मे यह कहा कि वैज्ञानिक मीनिंग और डिक्शनरी के अर्थ से करदेयता न ले कर व्यापारिक जगत की भाषा के अनुसार ही करदेयता मानी जानी चाहिए इस आधार पर माननीय न्यायालय ने टाफी को स्वाद व घटकों के आधार पर मिठाई नहीं माना। अपीलकर्ता की वस्तु व्यापारिक जगत में नैरोवूवन फैब्रिक के नाम से न जानी जाती है और न ही बिकती है, अपितु यह वस्तुएं लेस, टेप के रूप में जानी जाती हैं और केवल करदेयता से बचने के लिए अपीलकर्ता ने यह नाम क्वाईन किया है। अतः इस संबंध में उचित रूप से कर-निर्धारण अधिकारी ने इसे अस्वीकार किया। इस संबंध में विद्वान अधिवक्ता ने जो निर्णय सर्वश्री पोरटिस एंड स्पेन्सर (एशिया) लि0 का दिया है वह डायर फेल्ट के संबंध में विवेचन व निर्णय है और इस संबंध में अपीलकर्ता की निर्मित वस्तुओं पर कोई विवेचन नहीं है। अपीलकर्ता की वस्तुएँ टैक्सटाईल की श्रेणी में नहीं आती हैं। अतः टैक्सटाईल संबंधी टिप्पणी या निर्णय लागू नहीं होगें। सर्वश्री दिल्ली क्लाथ एंड जनरल मिल्स कंपनी लि0 के निर्णय मे "रेयन टायर, कोर्ड फैब्रिक" पर निर्णय दिया गया है और यह भी व्यापार जगत में प्रचलित नाम की वस्तु है जो निर्णय सर्वश्री ओम इंडस्ट्रीज, कानपुर का धारा-35 का प्रस्तुत किया गया है। अपील में कमिश्नर, व्यापार कर स्वयं एक पार्टी हैं और धारा-35 के निर्णय अपील निर्णयों में न तो बाईन्डिंग हैं और न प्रभाव रखते हैं। दूसरे इस निर्णय में फिशनेट फैब्रिकानाईलोन फिशनेट फैब्रिक पर निर्णय दिया गया है। यह वस्तु अपीलकर्ता नहीं बनाते हैं।
जो द्वितीय अपील व्यापारकर अधिकरण, नोएडा की द्वितीय अपील संख्या-23/04 व 24/04 वर्ष 97-98 के निर्णय का संदर्भ दिया गया है उसमें अपीलकर्ता की वस्तु पर कोई विवेचन नहीं हुआ है। माननीय अधिकरण ने इस निर्णय में केवल इस कारण से विचार किया है कि कर-निर्धारण अधिकारी ने वर्ष 95-96 में नैरो वूवन फैब्रिक को टैक्सटाईल श्रेणी में मान कर कर मुक्त किया है परन्तु विचाराधीन वर्षों में अपीलकर्ता के उत्पाद की जाँच हुई और उसके नमूने लिए गये हैं तथा उपरोक्तानुसार व्यापारिक जगत एवं सामान्य बोल चाल में अपीलकर्ता के द्वारा बतायी गयी वस्तु एन0डब्ल्यू0एफ0 के नाम से कोई व्यापार न होने तथा अपीलकर्ता की वस्तु टेप, निवाड़ लैस के रूप में पाये जाने के आधार पर पिछले वर्षों को आधार नहीं बनाया गया जा सकता। उल्लेखनीय है कि काटन फैब्रिक्स को केन्द्रीय अधिनियम 1956 की धारा-14 के क्लाज (iia) के अंतर्गत सैन्ट्रल एक्साईज टैरिफ एक्ट-1985 के शिड्यूल में हैडिंग नं0 52.05, 52.06, 52.07, 52.08, 52.09, 52.10. 52.11, 52.12, 58.01, 58.02, 58.03, 58.04, 58.05, 59.01, 59.03, 59.05, 59.06 एवं 60.01 को ही काटन फैब्रिक्स में रखा गया है जबकि जाँच पर पाया गया कि व्यापारी द्वारा सेन्ट्रल एक्साईज टैरिफ एक्ट के हैडिंग नं0-58.06 के अन्तर्गत उत्पादन शुल्क जमा किया जा रहा है। इस प्रकार स्पष्ट है कि व्यापारी द्वारा निर्मित सामान फैब्रिक्स के अंतर्गत नहीं आता है। वि0अनु0शा0 अधिकारी द्वारा जाँच में अपीलकर्ता द्वारा सैन्ट्रल टैरिफ एक्ट हैड-58.6 के अन्तर्गत उत्पादन शुल्क जमा किया जाना पाया गया है जिससे स्पष्ट है कि अपीलकर्ता द्वारा निर्मित वस्तु काटन फैब्रिक के अंतर्गत नहीं आती और 58.6 हैड की वस्तु को फैब्रिक नहीं माना गया और कर मुक्ति नहीं दी गयी। अपीलकर्ता द्वारा निर्मित वस्तु ओलीलोन निवाड़ पायी गयी जो लिये गये नमूनों पर लगे हुए टैग पर लिखे नाम से भी स्पष्ट है। दूसरे अपीलकर्ता ने इस वस्तु की बिक्री कि0ग्रा0 वजन में की है जबकि फैब्रिक्स की बिक्री वजन में नहीं होती है।"
Aggrieved by the order passed by the Joint Commissioner (Appeals) Second Appeals are filed by the assessee before the Trade Tax Tribunal, which have been decided and are dismissed by the Tribunal by its common judgment and order dated 21.09.2006, by which the Tribunal has affirmed the orders passed by the Assessee Authority as well as the First Appellate Authority, hence the present revisions.
Learned counsel for the revisionist has submitted that at the time when the revisionist company manufactured the NWF it falls within the ambit of 'cotton fabrics of all varities', therefore he claimed that the aforesaid item, namely, NWF is exempted from payment of tax.
Learned counsel for the revisionist has placed reliance on the notification no. 7038 dated 31.01.1985, as amended by notification no. 3714 dated 05.06.1985, which according to him specifically exempts textile fabrics as 'Cotton Fabrics of all Varities'.
Learned counsel for the revisionist, therefore contended that the term of 'Cotton Fabrics' has not been defined under the notification or under the Trade Tax Laws, as such the same has been defined specifically under Section 14 of the Central Sales Tax Act, 1956 as Cotton Fabrics Covered under various headings of the schedule of the Central Excise Tariffs Act, 1985, which includes chapter 58.06.
Learned counsel for the revisionist has submitted that Section 14 of the Central Sales Tax Act defines certain goods to be of special importance in inter-state trade or commerce. Sub Section (ii) of Section 14 provides as follows:-
"14 (ii) cotton, that is say, all kinds of cotton (indigenous or imported] in its un manufactured state, whether ginned or un ginned, baled, pressed or otherwise, but not including cotton waste; "
Learned counsel for the appellant has submitted that the word 'Cotton Fabrics' have not been defined either in the Act of 1948 or in the Central Excise Tariff Act, 1985. In Section 14 of the Central Sales Tax Act, 1956 delcaration of 'Cotton Fabrics' under different heading of goods of special importance in inter-state trade or commerce. The word 'Cotton Fabrics' is covered under the heading 59.3. Section 14(iia) of the Act, 1956, provides as follows:-
"14(ii-a) Cotton fabrics covered under heading Nos52.05, 52.06, 52.07, 52.08, 52.09, 52.10, 52.11, 52.12, 58.01, 58.02, 58.03, 58.04, 58.05, 58.06, 59.01, 59.03, 59.05, 59.06 and 60.01 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); "
Learned counsel for the appellant has submitted that the notification which has been issued under Section 4(a) of the U.P. Trade Tax Act, exempts Cotton Fabrics of all varities. Learned counsel for the revisionist has placed reliance of the word ' variety' which has been defined in Cancise Oxford English Dictionary in following words:-
"Variety" n. (pl. Varieties) 1. the quality or state of being different or diverse, 2. (a variety of) a number of things of the same general class that are distinct in character or quality, a thing which differs in some way from others of the same general class; a type. Bilowya subspecies or cultivar. 3. a form of entertainment consisting of a series of different types of act, such as singing, dancing, and comedy.
Origin C 15: from Fr. Varities or L. Varities, from various (see Various)."
Thus, different varities of "cotton fabrics" are exempted from the tax under the Act, 1948. Textile fabrics impregnated, coated, covered or laminated with PVC (Polyvinyl Chloride) are treated as textile fabric."
Learned counsel for the revisionist has placed reliance on a judgment of this Court in the case of Commissioner Trade Tax U.P. Lucknow Vs. Moti Lal Dali Chand Pvt. Ltd. (2009) 21 VST 191 (Allahabad).
The above case referred arises out of the order passed by the Tribunal, by which the Tribunal has held that 'NWF' and Braided Cords Fall under the category of Textiles and as such are exempted from payment of tax.
Learned Single Judge in the case of Moti Lal Dali Chand (supra) has considered the relevant notifications and the pleadings of the parties and after considering the material available on record as well as the decision taken by the State Government, by issuing a circular dated November 27th, 2003 with regard to taxability of 'NWF' and braided cords, arrived at a conclusion by holding the item exempted from payment of tax.
For the perusal and consideration of the said decision the relevant extract are reproduced herein below:-
"So far as facts mentioned in the order of the Tribunal are concerned, learned Standing Counsel is not able to controvert the findings recorded by the Tribunal. The fact remains that in the cae of Fibre Links, Kanpur v. CST [1991] STD (Trib.) 125, the Division Bench of the Tribunal held that the narrow woven fabrics and braided cord are exempted from tax being cotton fabrics. The revision against the order of the Tribunal has been dismissed by this Court and the view of the Tribunal has been accepted by the State Government. Additional Commissioner, Trade Tax (Legal) in its circular dated November 27, 2003 has informed to the Additional Commissioner, Kanpur about the decision of the State Government with regard to the taxability of narrow woven fabrics and braided cord. The contents of the letter are re-produced hereinbelow:
" प्रेषक, कमिश्नर, व्यापार कर उत्तर प्रदेश।
सेवा में, एडिश्नल कमिश्नर, ग्रेड-1, व्यापार कर, कानपुर जोन, कानपुर।
दिनांक 27 नवम्बर, 2003"
महोदय, कृपया नैरा वूवेन-फैब्रिक्स तथा ब्रेडेड कार्ड की करदेयता के सम्बन्ध में अपने अर्द्धशासकीय पत्र संख्या 4040, दिनांक 14 फरवरी, 2003 का संदर्भ ग्रहण करें, जिसके द्वारा उक्त वस्तुओं की करदेयता के सम्बन्ध में विवेचना आख्या प्रेषित की है। जिसमें सर्वश्री फाइबर लिंक्स, कानपुर के वर्ष 1989-90 के बाद में मा0 व्यापार कर अधिकरण के निर्णय में यह उद्धरित किया गया है कि ब्रेडेड कार्ड 'कार्ड सिम्प्लीसिटर' नहीं है और केवल वही कार्ड करयोग्य है, जो बांधने या कपड़ा सुखाने के लिए उपयोग में आते हों। उक्त निर्णय के विरुद्ध मा0 उच्च न्यायालय में रिवीजन दायर किये गये थे लेकिन उसकी सुनवाई के पहले ही कर-निर्धारण अधिकारी ने उपरोक्त सम्बन्ध में व्यापारी को अन्तिम कर-निर्धारण आदेश में कर-मुक्त घोषित कर दिया था तथा इस तरह के अन्य सभी व्यापारियों के सभी वर्षों के मामलों में व्यापारियों को करमुक्त घोषित किया जाता रहा, जिसके कारण मा0 उच्च न्यायालय ने उपरोक्त रिवीजन्स को उपरोक्त कारणों से निष्फल मानते हुये खारिज कर दिया था। ऐसी स्थिति में उक्त वस्तुओं की करदेयता की स्थिति स्पष्ट करने का अनुरोध किया गया था।
उपरोक्त के सम्बन्ध में आप द्वारा प्रेषित आख्या के परिप्रेक्ष्य में प्रकरण शासन को संदर्भित किया गया था। शासन स्तर पर प्रमुख सचिव, कर एवं निबन्धन की अध्यक्षता में दिनांक 30 अप्रैल, 2003 को सम्पन्न विधि समिति की बैठक में यह निर्णय लिया गया था कि इस तरह के मामलों में पूर्व वर्षों के सम्बन्ध में ऐसे व्यापारी के विरुद्ध धारा 21(2) की नोटिस न जारी की जाये तथा कतिपय सूचनायें उपलब्ध कराने की अपेक्षा की गयी थी, जिसे शासन को उपलब्ध करा दी गयी थी।
नैरा वूवेन-फैब्रिक्स तथा ब्रेडेड कार्ड पर व्यापार कर की देयता के सम्बन्ध में सम्यक् विचारोपरान्त शासन द्वारा अपने पत्र संख्या-क0नि0-2-4604/ग्यारह-03-9-(31)/03, दिनांक 25 नवम्बर, 2003 से सूचित किया है कि चूंकि मा0 अधिकरण के निर्णय के विरुद्ध रिवीजन मा0 उच्च न्यायालय द्वारा अस्वीकार किया गया है। अतः अधिकरण का निर्णय अन्तिम हो चुका है। इसलिए वर्तमान में इस पर कोई कर देय नहीं है।
कृपया शासन के उपरोक्त निर्देशों से अपने अधीनस्थ कर-निर्धारक अधिकारियों को निर्देशानुसार कार्यवाही करने का निर्देश देने का कष्ट करें।
भवदीय, ह0 (सोती रवीन्द्र चन्द्र) एडिश्नल कमिश्नर (विधि) व्यापार कर, मुख्यालय, उत्तर प्रदेश।"
In the aforesaid letter it has been categorically stated that the Government vide G.O. No. K.N.-2-4604/11-03-9(31)/03 dated November 25, 2003 has informed that since the revision against the decision of the Tribunal has been rejected, the decision of the Tribunal become final and there is no liability of tax on the narrow woven fabrics and braided cord. It is settled prinicple of law that the opinion of the Government and the circulars are binding upon the Revenue authorities."
Learned counsel for the revisionist has submitted that the issue of classification is to be decided on the basis of common parlance test. Learned counsel therefore contended that for recording a finding as to how a commodity is known in market and in common parlance, there has to be some evidence on record, without which common parlance test cannot be applied.
Counsel for the revisionit-assessee submitted that in the present case, there was no evidence on record, on the basis of which Tribunal and appellate authority have recorded findings that in common parlance the goods in question are not treated as narrow woven fabrics but are known as lace and tape. This findings is merely based on the personal opinion of the appellate authority and members of Tribunal, without any evidence on record to show how the goods manufactured by applicant are known in market.
Reliance in this regard is placed of Apex Court decision in the case of Commissioner of Customs Vs. Jaya Satya Marine Exports (P) Ltd. (2001) 9 SCC 765, wherein in para 7, Apex Court has held that in absence of evidence on record, judicial notice cannot be taken as to how a product is known in common parlance.
Learned counsel for the revisionist has also placed reliance of a judgment of the Supreme Court in the case of Commissioner of Central Excise, New Delhi Vs. Kanaut Plaza Restaurant Pvt. Ltd, New Delhi.
Particularly para 20, 33 and 36 are referred which are relevant and the same are reproduced herein below:-
"20. Time and again, the principle of common parlance as the standard for interpreting terms in the taxing statutes, albeit subject to certain exceptions, where the statutory context runs to the contrary, has been reiterated. The application of the common parlance test is an extension of the general principle of interpretation of statutes for deciphering the mind of the law-maker;
33. Therefore, what flows from a reading of the aforementioned decisions is that in the absence of a statutory definition in precise terms; words, entries and items in taxing statutes must be constructed in terms of their commercial or trade understanding, or according to their popular meaning. In other words they have to be constructed in the sense that the people conversant with the subject-matter of the statute, would attribute to it. Resort to rigid interpretation in terms of scientific and technical meanings should be avoided in such circumstances. This, however, is by no means an absolute rule. When the legislature has expressed a contrary intention, such as by providing a statutory definition of the particular entry, word or item in specific, scientific or technical terms, then, interpretation ought to be in accordance with the sceintific and technical meaning and not according to common parlance understanding.
36. The assessee has averred that "soft-serve" cannot be regarded as "ice-cream" since the former is marketed and sold around the world as "soft-serve". We do nto see any merit in this averment. The manner in which a product may be marketed by a manufacture, does not necessarily play a decisive role in affecting the commercial understanding of such end of the day notwithstanding marketing strategies. Needless to say the common parlance test operates on the standard of an average reasonable person who is not expected to be aware of technical details relating to the goods. It is highly unlikely that such a person who walks into a 'McDonalds" outlet with the intention of enjoying an "ice-cream", "softy" or "soft-serve", if at all these are to be constructed as distinct products, in the first place, will be aware of intricate details such as the percentage of milk fat content, milk non-solid fats, stabilisers, emulsifiers or the manufacturing process, much less its technical distinction from "ice-cream". On the contrary, such a person would enter the outlet with the intention of simply having an "ice-cream" or a "softy ice-cream", oblivious of its technical composition. The true character of a product cannot be veiled behind a charade of terminology which is used to market a product. In other words, mere semantics cannot change the nature of a product in terms of how it is perceived by persons in the market, when the issue at hand is one of excise classification."
At the end learned counsel for the revisionist has submitted that in the case of sister concern of the revisionist company, which was also engaged in manufacturing the same products i.e. NWF for assessment year 1997-98 the Tribunal by its order dated 19.11.2005 has held that NWF is exempted from payment of tax.
Per contra, learned Standing Counsel has placed reliance the contents of the assessment order and finding recorded by the assessing authority. The relevant extract of the assessment order is reproduced herein below.
"1. फर्म द्वारा पोली प्रोपलीन मल्टीफिलामेन्ट यार्न का उत्पादन व बिक्री तथा उससे नैरो वोवेन फैब्रिक्स नामक वस्तु का निर्माण व बिक्री की जाती है। निर्माता व्यापारी है, किन्तु कच्चे तथा तैयार माल का स्टाक रजिस्टर प्रस्तुत नहीं किया।
2. फर्म ने निर्मित माल नैरो वोवेन फैब्रिक्स को कर मुक्त मानकर कोई कर जमा नहीं किया गया है। यह वस्तु व्यापार कर अधिनियम के अन्तर्गत कर मुक्त नहीं है क्योंकि यह प्लास्टिक से बने हुये टेप अथवा सक्री निवाड है जिस पर 2.5% की दर से कर देयता है। इस पर कर मुक्ति के संबन्ध में कोई विविधक अथवा तथ्यात्मक साक्ष्य नहीं दिया गया।
मेरे द्वारा अभिलेख के परीक्षण पर यह पाया गया कि व्यापारी द्वारा बताया गया है कि पालीप्रोपलीन मल्टी फिलामेन्ट यार्न का उत्पादन करके उस उसी रूप में बेचा जाता है तथा उससे नैरो वोवेन फैब्रिक्स भी बनाकर विक्रय किया जाता है। उन्होंने वाद की सुनवाई के समय कैश बुक, लोजर तथा बिल बुक जॉच हेतु प्रस्तुत की किन्तु कच्चे तथा तैयार माल के स्टाक रजिस्टर प्रस्तुत नहीं किये जिन्हें रखना धारा-12(2) के अन्तर्गत अनिवार्य है। इस संबन्ध में उनके द्वारा बताया गया कि वर्ष-2001 में उनकी फैक्ट्री बन्द हो गयी थी तथा यू0पी0एफ सी ने बेच दी थी। इस कारण वश कुछ रिकार्ड मिल नहीं पा रहे हैं। व्यापारी का यह उत्तर संतोषजनक नहीं है। तथ्य यह है कि वाद की सुनवाई के समय कच्चे तथा तैयार माल के स्टाक रजिस्टर प्रस्तुत नहीं किये। अतः उत्पादन का सत्यापन नहीं किया जा सका।
नैरोवोवेन फैब्रिक्स को कर मुक्त मानने का बताया गया आधार विधिक दृष्टि से उचित नहीं है इसे एक्साईज विभाग द्वारा फैब्रिक्स की श्रेणी में वर्गीकृत किया गया है किन्तु यह एक्साइज एक्स के अन्तर्गत ड्यूटी के प्रयोजन से किया गया वर्गीकरण है। व्यापार कर अधिनियम के अन्तर्गत यही वर्गीकरण लागू नहीं होता है। व्यापारी द्वारा निर्मित नैरो वोवेन फैब्रिक्स वास्तव में प्लास्टिक से बुनी हुई कम चौड़ी पट्टी /निवाड है जिस पर विज्ञप्ति सं0-TIF-2-2376-11 दिनांक 23.11.1998 के अनुसार 205% की दर से कर देयता है। अतः इसे धारा-4 के अन्तर्गत कर मुक्त नहीं माना जा सकता।"
Learned Standing Counsel therefore has submitted that from the perusal of the assessment order, it is clear that goods namely 'NWF' manufactured by the revisionist is from Polypropeline Multi Filament (PPMF), which is commonly made of plastic and is Niwar therefore is liable to be taxed in view of the notification no. 1551 dated 26.05.1997 as well as notification no. 1376 dated 23.11.1998.
According to the learned Standing Counsel under Section 14(iia) of the Central Sales Tax Act, the commodity is 'Cotton Fabrics' covered under the heading as mentioned under the heading of man made Fabrics but since no record is available either in the form of challan or in any other documentary prove that the excise duty has been deposited on man made fabrics or 'Cotton Fabrics'. He has further pointed out that the assessing authority has held that the commodity in question falls within the category of Niwar which finding has been affirmed by the Appellate Authorities. Learned Standing Counsel has submitted that in fact, commodity in question namely 'NWF' having no percentage of cotton yarn and in fact, is an item made of Poly Plastic Yarn, which can not be exempted from payment of tax.
He has further submitted that at no point of time the assessee- revisionist has produced the books of accounts whereas several opportunities were allowed by the authorities and further in absence of challan showing the deposite of excise duty the claim of the revisionist can not be accepted namely that the assessee has paid the duty on Cotton Textile.
Learned Standing Counsel has referred the observations and finding recorded by the Tribunal, which records that the revisionist has manufactured small strips and Niwar made of multi filament yarn in the shape of roll and flat, which any view does not fall in the category of textile but in fact, is fall in the category of Niwar, therefore, is liable to be taxed.
At the end, learned Standing Counsel has placed reliance on a judgment in the case of M/s. Agra Building Work Vs. Commissioner of Sales Tax (1995) U.P. T.C. 793. He has also pointed out that entry 58.06 is used in the Section 14 of the Central Sales Tax Act at both the places, namely, with Cotton Fabrics as well as man made fabrics.
Per contra, counsel for the revisionist has reiterated that on the item, namely, NWF, the revisionist assessee has paid the excise duty under the heading of 58.06 and admittedly the said item falls under the category of Section 14(iia) of the Central Sales Tax Act therefore is exempted from payment of tax.
Having heard learned counsel for the parties at length and after considering the relevant material and documents as well as judgments relied by the respective parties, I am of the opinion that the finding recorded by the assessing authority confined by the first appellate authority as well as Tribunal are finding of facts, need no interference by this Court.
No question of law is involved and therefore the questions of law referred by the assessee and decided against the assessee.
So far as the revision filed against orders related to the Central Sales Tax Act, by which orders all the authorities below rejected the claim of the revisionist with regard to the Stock transfer, I am of the opinion that after due consideration and examination of the record, related to each transaction, the assessing authority rightly arrived at a conclusion to hold that the survey team has recovered various documents, which are seized, which clearly discloses that the claim of the revisionist is fictious and is unacceptable. It is noticed by the S.I.B. Survey Authorities that on the packing material the name (in short) of the purchaser was mentioned which clearly establishes that when the goods are dispatched, the revisionist was aware about the details of its purchaser.
The autorities below including the Tribunal have arrived at the conclusion that it is not the stock transfer but is a sale against the orders which are received by the revisionist from the buyers in advance.
In view of the aforesaid facts, no question of law arises in all the four revision petitions related to Central Sales Tax Act, accordingly the same are dismissed.
Accordingly, all the above mentioned revision petitions are dismissed.
There shall be no order as to cost.
Order Date :- 31.10.2018 SK Srivastava