P.K. MUMTHAZ Vs. ADDITIONAL SALES TAX OFFICER

JUDGEMENT

(1.) THIS writ appeal is filed against the judgment of the learned single judge holding that bed sheets made of cloth woven on powerloom is a separate commodity and is not entitled to sales tax exemption under item 10 of the Third Schedule to the Kerala General Sales Tax Act (hereinafter called as "the KGST Act", for short). We have heard learned counsel for the appellant and also learned Government Pleader appearing for the respondents and have also gone through the impugned judgment of the learned single judge.

(2.) THE assessments involved in this case are for the years 1996 -97 and 1997 -98. The appellant's case is that bed sheet made of powerloom cloth is essentially cloth as such and it is entitled to exemption under the specific entry provided under item 10 of the Third Schedule to the KGST Act. However, the finding of the Assessing Officer confirmed by the learned single judge following the decision of the Supreme Court in Delhi Cloth & General Mills Co. Ltd. v. State of Rajasthan reported in : [1980] 46 STC 256 (SC), is that bed sheet is a product made of cloth and so much so when there is no specific exemption for bed sheets the item falls outside the general category of powerloom cloth, covered by item 10 of the Third Schedule abovestated. In support of his contention learned counsel for the appellant has submitted that the specific entry providing for rate of sales tax on bed sheets was brought into the First Schedule to the KGST Act on December 31, 1999. Relying on this, the contention raised is that until the introduction of the specific entry providing rate of tax on bed sheets, what is required to be considered is whether the cloth from which it is made is woven on powerloom or handloom, both of which are exempted under the specific entry in the Third Schedule to the KGST Act. The undisputed fact is that the appellant is only a trader in purchase and sale of bed sheets, pillow covers, etc., which are made of cotton cloth but woven on power -loom. Item 10 of the Third Schedule provides for specific exemption on cloth woven on powerloom and therefore the question to be considered is whether bed sheet answers the description of "cloth" entitling the appellant for exemption.

(3.) BEFORE proceeding to consider the scope of the above entries, we should keep in mind the observations of the Supreme Court in Delhi Cloth & General Mills Co. Ltd.'s case : [1980] 46 STC 256 (SC), wherein the Supreme Court has held that "it is fairly well -settled principle that the words or expressions must be construed in the sense in which they are understood in the trade, by the dealer and the consumer. It is they who are concerned with it, and it is the sense in which they understand it that constitutes the definitive index of the legislative intention when the statute was enacted."