Judgment Case ID: 3873

Judgment:
Civil Appeal No. 2212 of 1977. Appeal by Special Leave from the Judgment and Order dated 11 5 19 of the Punjab and Haryana High Court in General Sales Tax Reference No 16/74. A. K. Sen	 A. R. Lal and Ashok Grover for the Appellant. J. D. Jain and M. N. Shroff for the Respondent. The Judgment of the Court was delivered by BHAGWATI	 J. The short question which arises for determination in this appeal is whether 'dryer felts ' manufactured by the assessee fall within the category of "all varieties of cotton	 woollen or silken textiles	 specified in Item 30 of Schedule `B ' of the Punjab General Sales Tax Act, 1948 (hereinafter referred to as the Act) If they are covered by this description, they would be exempt from Sales Tax imposed under the provisions of the Act, otherwise they would be liable to sales tax. The assessing authorities held that the `dryer Felts` manufactured by the assessee were not textiles" within the meaning of Item 30 of Schedule 'B ' and they were	 therefore	 not exempt from sales tax. The 'Tribunal	 on appeal	 also took the same view and rejected the claim of the assessee to exemption from sales tax in respect of sales of `dryer felts '. The assessee thereupon moved the Tribunal for making a reference to the High Court and on this application	 the following question of law was referred by the Tribunal for the opinion of the High Court: "Whether on the facts and circumstances of the case	 the products manufactured by the petitioner are not covered by Item 30 of Schedule 'B ' of the Punjab General Sales Tax Act	 1 1948	 and therefore	 not exempt from sales tax both under the Punjab General Sales Tax Act	 l948 and the Ccntral Sales Tax Act	 1956. " 547 The Reference was heard by Division Bench and on a difference of opinion between the two Judges constituting the Division Bench	 the Reference was placed before a third Judge. The third Judge held that 'dryer felts ' were not included in the expression 'textiles occurring in Item 30 of Schedule 'B ' of the Act and were	 therefore	 not exempt from sales tax and on this view the question referred to h Court was answered against the assessee and in favour of the Revenue. The assessee thereupon preferred the present appeal with special leave obtained from this Court. It is clear from section 5 sub section (1) of the Act that it levies sales tax on the taxable turnover of a dealer subject to the provisions of the Act. Sub section (2) of section S defines "taxable turnover" mean that part of a dealer 's gross turnover during any period which remains .after deducting therefrom inter alia his turnover on the sale of goods declared tax free under section 6. Section 6 provides that no tax should be payable on the sale. of goods specified in the first column of Schedule 'B ' subject to the conditions and exception	 if ' any set out in. the corresponding entry in the second column thereof any no dealer shall charge sales tax on the sale of goods which are declared tax free from time to time under this section. Schedule 'B ' sets out in the first column	 various categories of goods which are declared tax free under section 6 and Item 30 specifies the folloing category of tax free goods: All Varieties of cotton	 woollen or silken textiles including rayon artificial silk or nylon whether manufactured by handloom or powerloom or otherwise but not including pure silk fabrics	 carpets	 druggets	 woollen durees and cotton floor durees. ' ' The question is: whether 'dryer felts ' manufactured by the assesee fell within this category of goods so as to be exempt from sales tax ? Can it be said that 'dryer felts ' constitute a variety of cotton or woollen textiles ? The answer to the question depends on what is the true meaning of the word "textiles ' as used in Item 30 of Schedule `B '. Now	 the word 'textiles ' is not defined in the Act	 but it is well settled as a result of several decisions of this Court. Of which we may mention only a few	 namely	 Ramavatar Budhaiprasad vs Assistant Sales Tax officer	 Akola(1) and M/s Motipur Jamindary Co. Ltd. vs State of Bihar (2) and the State of West Bengal v Washi Ahmed(3) (1) A. T. K. (2) A. I. R. (3) ; 548 that in a taxing statute words of every	 day use must be construed not in thier scientific or technical sense but as	 understood in common parlance. The question which arose in Ramavatar 's case (supra) was whether betel leaves are vegetables and this Court held that they are not `irekldel within that term. 	This Court chuoted with approval the following passage from the judgment of the High Court of Madhya Pra desh in Madhya Pradesh Pan Merchant 's Association	 Santard Market	 Nagpur vs State of Madllya Pradeh(1): In our opinion	 the word "vegetables ' ' cannot be given the con lprehellsive mcaning the term bears in natural nistory and has not been given that meaning in taxing statutes beC fore The term "vegetables ' is to be understood as com monly understood denoting thosc classes of vegetable matter which are grown in kitchen gardens and are used for thc table." And observed that "the word 'vegetables ' in taxing statutes is to be understood as in common parlance i.e. denoting class of vegetabies which are grown in a kitchen garden or in a farm and are used for the table. " This meaning of the worc. 'vegetables ' was reiterated in M/s Motipur Jamindary case where sugarcane was held not to fall witbin Lhe definition of the word 'vegetables ' ancl the same mcaning was given to the word 'vegetables in Washi Ahmed 's case (supra) where greerl ginger was helcl to be 'vegetables ' within thc meaning of that word as used in common parlance. lt was pointed out by this Court in Washi Ahmed 's case (supIa) that the sarne principle of construction in .elation to words used in a taxing statute has also been adopted in English	 Canadiall and Americar Courls. Pollock B. pointed out in Gretfell vs 1. R. c.(o). that if a statutc contains language which is capable of being construed in a p3pular sense	 such a statute is to tbe construed according to the strict or technical meaning of the laaguage contained in it	 but is to be construed in its popular sense? meaning	 of eourse	 by the wor(ls "popular sense that which people conversant with the subject matter 	 w;tl. wh ich the statute is dealing. would attribute it." So also the Supreme Court of Canada said Planters Nut and Chocolate Co. Ltd vs 'The King(3) while interpreting the words 'fruits ' and 'vegetables ' in the Excise Act. " They are ordinary words in every day use and are	 therefore to be construed according to their popular sense". The same rule was expressed in slightly different language by Story	 J.	 in 200 Chests of Tea(4) where the learned Judge said that the parti (1) 7 section T. C. 99 at 102. (2) [1876] I E. D. 242 at 248. (3) (4) [1824] 9 Wheaton (US.) 430 at 438. 549 cular words used by the Legislature in the denomination of articles are to be understood according to the common commercial understanding of the terms used	 and not in their scientific or technical sense	 for the Legislature does "not suppose our merchants to be naturalists	 or geologists	 or botanists.". " There call	 therefore	 be no doubt that the word 'textiles ' in Item 30 of Schedule 'B ' must be interpreted according to its popular sense	 meaning "that scene which people conversant with the subject matter with which the statute is dealing would attribute to it". There we are in complete Agreement with the Judges who held in favour of the Revenue and against the assessee. But the question is: What result does the application of this test yield ? Are 'dryer felts ' not 'textiles ' within the ordinary accepted meaning of that word ? the word 'textiles is derived from the Latin 'texere ' which means 'to weave ' and it means any woven fabric. When yarn	 whether cotton	 silk	 woollen	 rayon	 nylon or of any other description as made out of any other material is woven into a fabric	 what comes into being is a 'textile ' and it is known as such. It may be cotton textile	 silk textile	 woollen textile	 rayon textile	 nylon textile or any other hind of textile. The method of weaving adopted may be the warp and woof pattern as is generally the case in most of the textiles	 or it may be any other process or technique. There is such phenomenal advance in science and technology	 so wondrous i. the variety of fabrics manufactured from materials hithereto unknown or unthought of and so many are the new techniques invented for making fabric out of yarn that it would be most unwise to confine the weaving process to the warp and woof pattern. Whatever be the mode of weaving employed	 woven fabric would be 'textiles '. What is necessary is no more than weaving of yarn and weaving would mean binding or putting together by some process so as to form a fabric. Moreover a textile need not be of any particular size or strength or weight. It may be in small pieces or in big rolls: it may be weak or strong	 light or heavy	 bleach or dyed	 according to the requirement of the purchaser. The use to which it may be put is also immaterial and does not bear on its character as a textile. It may be used for making wearing apparel	 or it may be used as a covering or bedsheet or it may be used as tapestry or upholstery or as duster for cleaning or as towel for drying the body. A textile may have diverse uses and it is not the use which determines its character as textile. It is	 therefore	 no argument against the assessee that 'dryer felts ' are used only as absorbents of moisture in the process of manufacture in a paper manufacturing unit. 'That cannot militate against 'dryer felts ' falling within the category of 'textiles '	 if otherwise they satisfy the description of 'textiles '. 550 Now	 what. are 'dryer felts ' ? They are of two kinds	 cotton dryer felts and woollen dryer felts. Both are made of yarn	 cotton in one case and woollen in the other. Some synthetic yarn is also used The process employed is that of weaving according to warp and woof pattern. This is how the manufacturing process is described by the assessing authority in its order dated 12th November	 1971 "the raw material used by . the company is cotton and woollen yarn which they themselves manufactured from raw cotton and wool and the finished products called 'felts ' are manufactured on power looms from cotton and woollen yarn." 'Dryer felts ' are	 therefore	 clearly woven fabrics and must be held to fall within the ordinary meaning of the word 'textiles '. We do not think that the word 'textiles ' has any narrower meaning in common parlance other than the ordinary meaning given in the dictionary	 namely	 a woven fabric. There may be wide ranging varieties of woven fabric and they may go on multiplying and proliferating with new developments in science and technology and inventions of new methods" materials and techniques	 but nonetheless they would all be textiles. The analogy of cases where the word 'vegetables ' was held not to include betel leaves or sugar cane is wholly inappropriate. There	 what was disapproved by the Court was resort to the botanical meaning of the word 'vegetables ' when that word had acquired a popular meaning which was different. It was said by Holmes	 J.	 in his inimitable style: "A word is not a crystal	 transparent and unchanged; it is the skin of a living Thought and may vary greatly in colour and content according to the circumstances and the time in which it is used. " Where a word has a scientific or technical meaning and also an ordinary meaning according to common parlance	 it is in the latter sense that in a taxing statute the word must be held to have been used	 unless contrary intention is clearly expressed by the Legislature. The reason is that as pointed out by Story	 J.	 in 200 Chest. (of Tea (supra)	 the Legislature does "not suppose our merchants to be naturalists	 or geologists	 or botanists". But here the word 'textiles ' is not sought by the assessee to be given a scientific or technical meaning in preference to its popular meaning. It has only one meaning. namely	 a woven fabric and that is the meaning which it bears in ordinary parlance. It is true that out minds are conditioned by old and antiquated notions of what are textiles and	 therefore	 it may sound a little strange to regard 'dryer felts ' as 'textiles ': But it must be remembered that the concept or 'textiles ' is not a static concept. It has	 having regard to newly developing materials	 methods	 techniques and processes	 a continually expanding content and new kinds of fabric may be invented which may legitimately	 without doing any violence to the language	 be regarded as 'textiles '. Take for example rayon and nylon fabrics 551 which have now become very popular for making wearing apparel. When they first came to be made	 they must have been intruders in the field of 'textiles ' because only cotton	 silk and woollen fabrics were till then recognized as 'textiles '. But today no one can dispute that rayon and nylon fabrics are textiles and can properly be described as such. `We may take another example Which is nearer to the case before his. It is common knowledge that certain kinds of hats are made out of felt and though felt is not ordinarily used for making wearing 	 apparel	 can it be suggested that felt is not a 'textile ' ? The character of fabric or material as textile does not depend upon the use to which it may be put. The uses of textiles in a fast developing economy are manifold and it is quite common now to find 'textiles ' being	 used even for industrial purposes. If were look at the 	 we find in Chapter 59 occurring in section Xl of the First Schedule that there is a reference to 'textile fabrics and textile articles	 of a kind commonly used in machinery or plant ' and clause (4) of that Chapter provides that this expression shall be taken to apply inter alia to 'woven textile felts. of a kind commonly used in paper making or other machinery. . . ". This reference in a statute which is intended to apply to imports made by the trading community clearly shows that 'dryer felts ' which are woven textile felts. of a kind commonly used in paper making machinery" are regarded ill common parlance	 according to the sense of ordinary traders and merchants	 textile fabrics. We have	 therefore	 no doubt that 'dryer felts ' are 'textiles ' within the meaning of that expression in Item 3() of Schedule 'B '. We accordingly allow the appeal	 set aside the Judgment of the High Court and answer the question referred by the Tribunal in favour of the assessee and against the Revenue. The State will pay to the assessee costs throughout. S.R. Appeal allowed .

Summary:
The 'any felts ' manufactured by the appellant assessee were held by the assessing authorities to be not 'textiles ' within the meaning of Item 30 of Schedule 'B ' the Punjab General Sales Tax Act	 1318 and thereafter	 on appeal the Tribunal and on reference the High Court also confirmed this view. Allowing the appeal by special leave	 the Court ^ HELD: 1. 'Dryer felts ' are 'textiles ' within the meaning of that expression in Item 30 of Schedule 'B ' to the Punjab General Sales Tax Act	 1948. [551 E] 2. In a taxing statute words of every day use must be construed not in their scientific or technical sense but as understood in common parlance	 meaning "that sense which people conversant with the subject matter with which the statute is dealing would attribute to it." [548 A	 F] Ramavatar Budhaiprasad vs Assistant Sales Tax officer	 Akola	 A.l.R. 	 M/s. Motipur Jamindary Co. Ltd. vs State of Bihar	 A.l. R. 	 State of West Bengal vs Washi Ahmed. ; and Madhya Pradesh Pan Merchant 's Association	 Santara Market	 Nagpur vs State of Madhya Pradesh	 7 S.T.C. 99 at 102 referred(1 to E Gretfell vs IR.C. [1876)] I exhibit D. 242 at 248	 Planters Nut and Choco Co. Ltd. vs The King	 [1951] 1 DLH 385 and 200 Chests of 'Tea	 (1824) 9 Wheaton (U.S.) 430 at 438; quoted with approval. Where a word has a scientific or technical meaning and also an ordinary meaning according to common parlance	 it is in the latter sense that in a taxing statute the word must be held to have been used	 unless contrary intention us clearly expressed by the Legislature. The reason is that the Legislature does not suppose our merchants to be 'naturalists	 or geologists	 or botanists". In the instant case the word 'textiles ' is not sought by the assessee to be given a scientific in preference to its popular meaning. It has only one meaning namenamely a woven fabric and that is the meaning or technical meaning which it bears in ordinary parlance. [550 E G]. The concept of 'textiles ' is not a static concept. It has	 having regard to newly developing materials	 methods techniques and processes	 a continually expanding content and new kinds of fabric may be invented which may legitimately	 without doing any violence to the language be regarded as textiles [550 H] The word 'textiles ' is derived from Latin 'texere ' which means 'to weave ' and it means woven fabric. When yarn	 whether cotton	 silk. woollen rayon	 nylon or of any other description or made out of any other material is woven into a fabric	 what comes into being is a 'textile ' and is known as such. Whatever be 546 the mode of weaving employed	 woven fabric would be 'textile '. What is necessary is no more than meaning of yarn and weaving would mean binding or putting together by some process so as to form a fabric. A textile need not be of any particular size or strength or weight. the use to which it may be put is also immaterial and does not bear on its character as a textile. The fact that the 'dryer felts ' are used only as absorbents of moisture in the process of manufacture in a paper manufacturing unit	 cannot militate against 'dryer felts ' falling within category of textiles	 if otherwise they satisfy the description of textiles. The refers to textile fabrics in this sense. [549 C D	 E F.	 G H] Ramavatar Budhaiprasad vs Assistant Sales lax officer Akola; 	 and M/s. Motipur Jamindary Co. Ltd. vs Stale of Bihar	 ; 	 distinguished.