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PETITIONER: THE ASSISTANT COMMISSIONER OFSALES TAX, KERALA.

       Vs.

RESPONDENT: M/S P.KESAVAN & CO.

DATE OF JUDGMENT14/11/1995

BENCH: BHARUCHA S.P. (J) BENCH: BHARUCHA S.P. (J) FAIZAN UDDIN (J) MAJMUDAR S.B. (J)

CITATION:  1995 SCC  Supl.  (4) 709 1995 SCALE  (6)473

ACT:

HEADNOTE:

JUDGMENT: O R D E R      The appeals,  by certificate,  arise  upon  the  common judgment of  a Division  Bench  of  the  Kerala  High  Court whereby  writ   petitions  filed  by  the  respondents  were allowed.      The respondents  were sellers  of Caristrap  Rayon Cord Strapping.  According   to  them,  the  said  strapping  was exempted from  taxation under  the Kerala  General Sales Tax Act, 1963.  They felied  in  this  behalf  upon  Entry-7  of Schedule-III to  the said  Act. Schedule-III  sets  out  the goods which  are exempted  from sales tax under Section-9 of the said Act. Entry-7 thereof reads thus:      "Cotton  fabrics,   woolen  fabrics  and      rayon  or  artificial  silk  fabrics  as      defined in  Items Nos.  19,  21  and  22      respectively of  the First  Schedule  to      the Central Excise and Salt Act, 1944." Item No.22  of the  First Schedule to the Central Excise and Salt Act, 1944, so far as it is relevant, read as follows:      Rayon or Artificial Silk Fabrics -      "Rayon  or   artificial   silk   fabrics      include  all   variteties   of   fabrics      manufactured  either  wholly  or  partly      from rayon or artificial silk."      The said strapping, according to the writ petitions, is a fabric  made purely  from rayon yarns. The rayon yarns are used with  bonding agents in fabricating the said strapping. The percentage of the bonding agent used for fabricating the said strapping  is negligible.  Sample of the said strapping with its  literature was annexed to the writ petitions. Upon this  basis  it  was  contended  that  the  refusal  by  the assessing authority  of exemption under Entry-7 of Schedule- III of  the said  Act was erroneous. The appellants filed an affidavit to  counter the  averments in  the writ petitions. They submitted that the writ petitions were not maintainable

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in that  the writ  petitioners had not chosen to agitate the issue before the appropriate sales tax authorities in appeal and revision.  The counter  also  submitted  that  the  said strapping was  a different and distinct commercial commodity and it  was so  understood in  the commercial  world and  by persons using  the same. The writ petitions were rejected by the learned single judge, who found that the requirements of Entry-7 of  Schedule-III to  the Act were not satisfied. The Division  Bench   allowed  the  appeals  filed  against  his decision,  observing   that  all   articles   produced   and manufactured by  the use  of rayon  would be  rayon fabrics. Before the  learned single  judge and the Division Bench the appellants, that  is to  say,  the  sales  tax  authorities, strenuously contended  that technical  matters were involved and  that   the  appropriate  authorities  to  go  into  and appreciate  such  technical  matters  were  the  authorities provided for  in the said Act. Both the learned single judge and the Division Bench negatived this contention.      These appeals  had come  up earlier for hearing and the bench of two learned judges came to the conclusion that they should be  heard by  a bench  of three judges in view of the fact that  new techniques had been evolved for making fabric out of  yarn and  it might  be inadvisable  to  confine  the weaving process to the warp and woof method.      What has  to be  seen,  having  regard  to  Entry-7  of Schedule-III of  the said  Act read  with Item  No.22 of the First Schedule  of the Central Excise and Salt Act, 1944, is whether the said strapping is a fabric, manufactured, either wholly or  partly, from  rayon.  As  aforestated,  the  only material placed  by the respondents before the court was the bare statement  that the said strapping was made purely from rayon yarns  and the  percentage of  bonding agent  used  in fabricating the  said strapping was negligible. The brochure which was  annexed to  the writ  petition is  before us.  It describes the  various uses  to which the said strapping can be put;  it does  not describe the process of manufacture or fabrication of  the said  strapping, the  inputs therein and the percentage  of the  bonding agent  used.  The  principal question is whether the said strapping is a fabric made from rayon yarn  and no  material was  placed before the court in the writ  petition to  show that it was. In view thereof, we think that  the  writ  petitions  ought  not  to  have  been entertained and  the respondents  ought to have been drected to agitate their grievances before the authorities under the Act. These  authorities would have been in a better position to seek  and appreciate the necessary evidence and determine whether or  not the  said strapping  was something that fell within the scope of Entry-7 of Schedule-III to the Act.      Where technical  matters are involved, and particularly when  processes  of  manufacture  have  become  increasingly complicated, it  is appropriate  that the  authorities  best competent to  deal with such matters should be allowed to do so. The  learned single  judge was  swayed by  the fact that some time  had already  elapsed since  the writ petition was admitted. Far  less time  had elapsed  then than has elapsed now. The  Division Bench  cited judgments  in support of the view that  it was  not necessary to refer the respondents to the authorities  under the  Act. It  does not appear to have appreciated that  regard must  be had  to the  facts of each case. Where  sufficient evidence  is placed  before the writ court for  an unambiguous  conclusion upon technical matters to be  reached, those  authorities might be apposite, but we must stress  that where  intricate technical  processes  are involved, it  is proper  that the  writ court  should direct writ  petitioners   to  agitate   their  grievances   before

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statutory authorities  who are  more competent to assess the merits thereof.      We are  satisfied that  the decision  of  the  Division Bench was given upon inadequate material. This decision must be set aside and the respondents relegated to such remedy as they may have under the provisions of the said Act.      The appeals  are allowed.  The judgment and order under appeal is  set aside. The respondents shall be at literty to adopt appropriate proceedings under the Kerala General Sales Tax Act, 1963, to claim exemption for the said strapping for the  years   1970-71  and   1971-72.  If   the   appropriate proceedings are adopted by 1st January, 1996, the same shall be decided  without taking  the aspect  of  limitation  into account. There shall be no order as to costs.