Case: Delhi Cloth &amp; General Mills Co. Ltd. &amp; Ors Vs. R. R. Gupta, Commercial Tax Officer, Jaipur &amp; Anr

fashion as the cotton fabrics are specified by name in item 19.It is certainly a question which appertains to the knowledge of technical aspects of textile weaving and production to determine at what stage threads or cords forming warps and wefts really amount to a "fabric". It is true t hat the term fabric has a wide meaning. Its first meaning given in the Oxford English Dictionary is: "A product of skilled workmanship". The first example of such a product is: "An edifice, a building". The fourth example of the first meaning is: I "a manufactured material; now only a textile fabric, a woven stuff". 9. We think that we are necessarily concerned here only with "textiles" as fabrics. This is clear from entries 19 to 22(D) of the first Schedule of the Central Excises and S alt Act, 1944. Entry 22AA is "textile fabrics not elsewhere specified". This residuary entry and the descriptions in preceding entries seem to us to make it abundantly clear that we are dealing here only with "textile fabrics". The case of the Delhi Cloth Mills also is that the product is a. "textile". There fore, the essential question to determine is the stage at which the goods under consideration become a textile fabric". The meaning of the term "textile", given in the Oxford Dictionary, is: "A woven fabric; any kind of cloth". It must acquire a body and a texture. Presumably it is not just the skeleton of a textile. Apparently, it is more than that. But, against pushing this point of view too far it may be urged that in t he technical and commercial parlance we are dealing with a "fabric". 10. It is, therefore, difficult to find fault with the view of the High Court that there is no error apparent on the face of the record and that the taxing authorities should be left to determine whether the "tyre cord fabric" is more correctly capable of being described as a fabric or as merely cord pretending to pass off as ar textile fabric This is really a technical question. In any case, it is a question on which two views seem possible on apparent facts. And, neither of the two views can be rejected outright as untenable. It requires careful consideration of the technical processes of manufacturing, of the composition of the "tyre cord fabric, and an evaluation of opinion of experts on the subject, to be able to decide the question satisfactorily may also require some examination of commercial usage and terminology or the language of the market in goods of this type. We, therefore, think that the High Court was right in not interfering with the decisions of the taxing authorities at this stage. We also think that for the same reason we could not interfere under Article 32 with the decision of the Commercial Tax officer. Indeed, no fundamental right is shown to be affected by a mere determination of the question indicated above. There is no absence of jurisdiction of the taxing authorities who had the power to decide the question either rightly or wrongly. 11. It has been urged, on behalf of the Delhi Cloth Mills that the High Court should have interfered as the question whether the tyre cord fabric is the end product or not in the final manufacture of an- other fabric was quite irrelevant. It was submitted that, so far as the Delhi Cloth Mills is concerned, the goods under consideration constitute the "end product" which they sell in the market. The example given was that of cloth which is the "end product" for the mills which manufacture cloth, but, it becomes the raw material for tailors and for those who make ready-made clothes to sell them. This argument overlooks that it is not so much the point of manufacture at which the Mills sell their own product which determine s the nature of goods which are entitled to exemption, but it is the stage reached by this product, in the process of manufacture of fabrication of a "textile", which should decide the question. As we have already indicated, the context in which the entry occurs shows that it is meant for "textile" fabrics and not for any kind of fabric. Therefore even if the tyre cord fabric may be the end product for the Delhi Cloth Mills, the crucial question is: Does this product constitute a fabric which is a textile? A textile fabric does not cover everything which could be made into a fabric. Mere cord does not become a textile fabric just because it requires some skill to make it. The rather wide dictionary meanings of the term "fabric" do not appear to us to give the exact meaning of the term "fabric" as used in the relevant entries entitled to exemption. In the entries, it evidently means a fabric which is also a textile. The question, therefore, to be determined by the Tax authorities themselves is whether the product for which the Delhi Cloth Mill claims exemption Is a textile fabric and not any other kind of fabric.Having indicated the nature of the enquiry which must by undertaken by the taxing authorities, w e find that there is no sufficient reason for overriding and discarding the High Courts view that, on what appeared to the High Court to be a question of fact, it should not decide whether the product under consideration constitutes a fabric entitled to exemption. 12. There was no appeal by the State of Rajasthan. It does not, therefore, seem propel. for us to finally decide, on merits, the question argued before us in the appeals by the Delhi Cloth Mills which are before us unless we could have decided the matter in favour of the appellant. We could have only done that if we were of opinion that the taxing authorities had committed error apparent on the face of the record. But, as already indicated above, we are not of this opinion. 13.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It is urged on behalf of the Delhi Cloth Mills that no disputed question of fact arises. It is submitted that, on admitted facts, it could be decided whether the "tyre cord fabric" is an exempted "fabric" or not. We think that this view over-looks several matters, indicated below, including the admission on behalf of the Delhi Cloth Mills that, in the case before us, the "tyre cord fabric" manufactured by it is woven by its purchasers "into a fabric in the same way as is being done by the first petitioner". This cert ainly means that the tyre cord fabric serves as raw material for another fabric which ultimately emerges by subjecting the goods manufactured by Delhi Cloth Mills to a process of impregnating with rubberIt is, therefore, difficult to find fault with the view of the High Court that there is no error apparent on the face of the record and that the taxing authorities should be left to determine whether the "tyre cord fabric" is more correctly capable of being described as a fabric or as merely cord pretending to pass off as ar textile fabric This is really a technical question. In any case, it is a question on which two views seem possible on apparent facts. And, neither of the two views can be rejected outright as untenable. It requires careful consideration of the technical processes of manufacturing, of the composition of the "tyre cord fabric, and an evaluation of opinion of experts on the subject, to be able to decide the question satisfactorily may also require some examination of commercial usage and terminology or the language of the market in goods of this type. We, therefore, think that the High Court was right in not interfering with the decisions of the taxing authorities at this stage. We also think that for the same reason we could not interfere under Article 32 with the decision of the Commercial Tax officer. Indeed, no fundamental right is shown to be affected by a mere determination of the question indicated above. There is no absence of jurisdiction of the taxing authorities who had the power to decide the question either rightly or wronglyHaving indicated the nature of the enquiry which must by undertaken by the taxing authorities, w e find that there is no sufficient reason for overriding and discarding the High Courts view that, on what appeared to the High Court to be a question of fact, it should not decide whether the product under consideration constitutes a fabric entitled to exemptionThere was no appeal by the State of Rajasthan. It does not, therefore, seem propel. for us to finally decide, on merits, the question argued before us in the appeals by the Delhi Cloth Mills which are before us unless we could have decided the matter in favour of the appellant. We could have only done that if we were of opinion that the taxing authorities had committed error apparent on the face of the record. But, as already indicated above, we are not of this opinion.