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PETITIONER: PORRITTS & SPENCER (ASIA) LTD. A

       Vs.

RESPONDENT: STATE OF HARYANA

DATE OF JUDGMENT06/09/1978

BENCH: BHAGWATI, P.N. BENCH: BHAGWATI, P.N. TULZAPURKAR, V.D. PATHAK, R.S.

CITATION:  1979 AIR  300            1979 SCR  (1) 545  1979 SCC  (1)  82  CITATOR INFO :  RF         1980 SC1552  (7)  R          1981 SC1524  (8)  RF         1981 SC1649  (9)  R          1983 SC1098  (6)  R          1985 SC 679  (32)  RF         1986 SC 626  (12,16,17)  RF         1986 SC1730  (8)  R          1988 SC2223  (12)  F          1989 SC 622  (4)  F          1990 SC 455  (6)

ACT:      Punjab General Sales Tax Act, 1948, Item 30 of Schedule ’B’ Jo the Act-Whether ’dryer felts fall within the category of "all varieties of cotton, woollen or silken textiles."

HEADNOTE:       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 v. Assistant Sales Tax officer, Akola, A.l.R.  1961 SC 1325, M/s. Motipur Jamindary Co. Ltd. v. State  of Bihar, A.l.R. 1962 SC 660, State of West Bengal v. Washi  Ahmed. [1977]  3 S.C.R. 149 and Madhya Pradesh Pan Merchant’s Association,  Santara Market,  Nagpur v. State of Madhya Pradesh, 7 S.T.C. 99 at 102 referred(1 to E      Gretfell v. IR.C. [1876)] I Ex. D. 242 at 248, Planters Nut and  Choco Co.  Ltd.   v. The King, [1951] 1 DLH 385 and

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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].        3. 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 Customs, Tariff  Act, 1975 refers to textile fabrics in this sense. [549 C-D, E-F., G-H]        Ramavatar Budhaiprasad v. Assistant Sales lax officer Akola, A.I.R.  1961 SC  1325 and  M/s. Motipur Jamindary Co. Ltd. v. Stale of Bihar, A.I.R. 1962 SC 660, distinguished.

JUDGMENT:       CIVIL APPELLATE JURISDICTION: 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

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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 v.  Assistant Sales  Tax officer,  Akola(1) and M/s Motipur Jamindary Co. Ltd. v. State of Bihar (2) and the State of West Bengal v Washi Ahmed(3)      (1) A. T. K. 1961 SC 1325.      (2) A. I. R. 1962 SC 660.      (3) [1977] 3 SCR 149.

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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  v.  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 v.  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 v. ’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 S. T. C. 99 at 102.   (2) [1876] I E. D. 242 at 248.        (3)  [1951] 1 D.L.R. 385.  (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

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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

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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 Customs  Tariff Act,  1975, 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 . 552

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