Case: Commissioner Of Sales Tax, U.P Vs. M/S. Sarin Textiles Mills

answer the description of "yarn" in the ordinary commercial sense, must have two characteristics. Firstly, it should be a spun strand. Secondly, such strand should be primarily meant for use in weaving, knitting or rope-making.15. Now, it is an undisputed fact, in the instant case that "woollen carpet kati" is unspun fibre. It lacks the first characteristic of "yarn". It is therefore possible to say that by itself, the expression "yarn of all kinds" in the notifications, quoted above, would not cover unspun fibres. But the succeeding phrase "including unspun fibre used in weaving" qualifies the preceding expression "yarn of all kinds". This phrase, which, in one sense, extends the connotation of "yarn" by including in it unspun fibre, pinpoints and highlights, on the other hand, the usability of such unspun fibre in weaving as a determinative circumstance.16. The question thus narrows down into the issue: Is woollen carpet kati - which is admittedly unspum fibre" used in weaving" within the contemplation of these notifications ? Again, "weaving" has not been defined in these notifications or the other statuary provisions. We have therefore to fall back upon its ordinary dictionary meaning. In that sense, weaving implies the process of forming thread into fabric byinterlacing. "The most important method by which wool products are produced is weaving, theinterlacingat right angles of two or more systems of threads. Variations are almost limitless but all are derived from three basic weaves, plain, satin and twill. Hundreds of yarns, found on large spool or beam form the warp. Each yarn is drawn through the eye of a heddle or wire mounted on a harness frame. The alternate raising and lowering of the frames, each with its hundreds of heddles controlling the warp yarns, forms the shed, the space through which the weft or filling yarn is carried by the shuttle, a long streamlined box holding a bobbin of yarn in its hollowed center. Each trip of the shuttle is called a pick. After each pick the harness frames shift position in accordance with the pre-determined pattern, producing a new shed or different combination of raised and lowered warp yarns. The filling yarn are beaten down with a weavers reed to make a tighter weave". (Encyclopaedia Brittanica Vol. 23, p. 342, 1971 Edn.)17. Thus "weaving" is the process of combining warp and weft components. (respectively lengthwise and cross- wise) to make a woven structure. The threads that lie lengthwise are called the warp. The other threads which are combined with the warp and lie widthwise, are called the "weft" also known as "wool" . An individual thread from the warp of indefinite length, is called an end; each individual length of weft from one edge to the other is called a pick. Consecutive picks are usually consecutive lengths of one piece of weft yarn that is repeatedly folded back on itself. In all methods of weaving before a length of weft is inserted in the warp, the warp is separated, over a short length extending from the cloth already formed, into two sheds. The process is called shedding. The sequence of primary operations in one weaving cycle is thus shedding, picking and beating in (Encyclopaedis Brittanica Vol, 23, page 342)."Weaving is differentiated from both warp and weft, knitting from braiding, and from net making, in that these processes all make use of only one set of elements. In addition, there are geometrical differences". (Encyclopaedia ibid)18. The ground having been cleared, it is to be seen whether the process by which wollen carpet kati is used in preparation of carpets, can properly be called"weaving".19. Now, the facts found on the basis of evidence adduced by the Additional Appellate Commissioner and the Judge (Revisions) Sales Tax are that such woollen kati are short cut pieces of unspun fibre (each of which according to the aforesaid Encyclopaedia is about 2 inches in length).It has very little tensile strength and is not used as it is not capable of being used - for weaving, knitting or rope- making. The only use to which the kati or pile is put is by attaching each piece by hand around two warp threads. The kati is not a component of the basic fabric of the carpet. It is not an integral constituent of the warp and weft of the carpet which consists of different spun fibre of great tensile strength i.e. of yarn. The process of lopping or knotting theses pile tuffs is different and distinct from the process of lengthwise and crosswise combining of warp and weft components, which makes the woven basic structure of the carpet.20.In view of these primary facts found by the taxing authorities, the conclusion is inescapable, that woolen carpet kati is neither "yarn" nor "unspun fibre used in weaving" withing the contemplation of the aforesaid notifications issued under Section 3-A.21. This takes us to be the second question as to whether such kati would fall within the ambit of "woollen goods" under Entry 46 of Notification (iii) set out above.22.Here also, we find ourselves in agreement with the Division Bench of the High Court that woollen carpet kati is only raw material from which "woollen goods" are prepared. In this connection it is to be noted that yarn used in weaving the warp and weft of carpets, or woollen fibre used in weaving has been made taxable at a far lower rate than "woollen goods" under the notifications. It could never be the intention that a mere component or raw material used in the manufacture of woollen goods by a manual process not being a process of weaving, should be taxed at a far higher rate, by treating the same as a finished "woollen goods."23. For the foregoing reasons, we are of the opinion that woollen carpet kati" is neither "yarn" nor "woollen good" falling under the aforesaid notifications issued under Section 3-A. It is an unclassified item and its turnover is liable to tax at the rate of 2% under Section 3 of the Act.

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

Explanation:
0[ds]14. Thus, a fibre in order to answer the description of "yarn" in the ordinary commercial sense, must have two characteristics. Firstly, it should be a spun strand. Secondly, such strand should be primarily meant for use in weaving, knitting or rope-making.15. Now, it is an undisputed fact, in the instant case that "woollen carpet kati" is unspun fibre. It lacks the first characteristic of "yarn". It is therefore possible to say that by itself, the expression "yarn of all kinds" in the notifications, quoted above, would not cover unspun fibres. But the succeeding phrase "including unspun fibre used in weaving" qualifies the preceding expression "yarn of all kinds". This phrase, which, in one sense, extends the connotation of "yarn" by including in it unspun fibre, pinpoints and highlights, on the other hand, the usability of such unspun fibre in weaving as a determinative circumstance.Thus "weaving" is the process of combining warp and weft components. (respectively lengthwise and cross- wise) to make a woven structure.n view of these primary facts found by the taxing authorities, the conclusion is inescapable, that woolen carpet kati is neither "yarn" nor "unspun fibre used in weaving" withing the contemplation of the aforesaid notifications issued under Sectionalso, we find ourselves in agreement with the Division Bench of the High Court that woollen carpet kati is only raw material from which "woollen goods" are prepared. In this connection it is to be noted that yarn used in weaving the warp and weft of carpets, or woollen fibre used in weaving has been made taxable at a far lower rate than "woollen goods" under the notifications. It could never be the intention that a mere component or raw material used in the manufacture of woollen goods by a manual process not being a process of weaving, should be taxed at a far higher rate, by treating the same as a finished "woollen goods."23. For the foregoing reasons, we are of the opinion that woollen carpet kati" is neither "yarn" nor "woollen good" falling under the aforesaid notifications issued under Section 3-A. It is an unclassified item and its turnover is liable to tax at the rate of 2% under Section 3 of the Act.