(1.) AT the instance of the assessee in Sales Tax Reference No. 12 of 1978, the following question is referred to us for our opinion under section 69 (1) of the Gujarat Sales Tax Act, 1969 (hereinafter referred to as "the Gujarat Act" for the sale of brevity) : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that tarpaulins are not prepared from cotton fabrics or textile fabrics, and therefore, their sales amounting to Rs. 31,775 are not covered by entry 18 (a) of Schedule II, Part A, to the Gujarat Sales Tax Act, 1969, as contended by the applicant but are covered by entry 13 of Schedule III to the said Act as held by the sales tax authorities ?"
(2.) THE question arises in the following circumstances : THE assessment year with which we are concerned in this reference is from 6th May, 1970, to 31st March, 1971. THE assessee is a dealer reselling cotton canvas cloth, hosiery, rain coats, eyelets, tarpaulins, etc. In the course of the assessment for the said period, the Sales Tax Officer had subjected these sales to tax under entry 13 of Schedule III to the Gujarat Act. This conclusion of the Sales Tax Officer was upheld by the Assistant Commissioner who partially allowed the appeal against the order of the Sales Tax Officer imposing penalty with which we are not concerned in this reference. THE assessee, therefore, carried the matter in appeal before the Gujarat Sales Tax Tribunal in course of which the assessee contended in the first place that the tarpaulin should be classified as cotton fabrics not liable to be taxed under entry 37 of Schedule I to the Gujarat Act, and in the alternative, they should be treated as articles prepared from textile fabrics, and therefore, liable to be taxed under entry 18 (a) of Part A of Schedule II to the Gujarat Act. THE Tribunal was not impressed with any of these contentions since according to the Tribunal the assessee was not able to establish that the tarpaulins were cotton fabrics impregnated or coated with preparation of cellulose derivatives or other artificial plastic material, and therefore, they were not cotton fabrics as defined in item 19 of the First Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as "the Excise Act" for the sake of brevity), which definition has been incorporated in entry 37 of Schedule I to the Gujarat Act. THE alternative contention was rejected since, in the opinion of the Tribunal, the waterproof cloth out of which tarpaulins have been prepared cannot be held to be textile as the waterproof cloth has got altogether different use from that of textile and in commercial parlance also it cannot be classified as textile fabrics. In support of this view, the Tribunal relied on the two decisions of the Madras High Court in State of Tamil Nadu v. East India Rubber Works [1974] 33 STC 399 and M. Jeewajee and Co. v. State of Tamil Nadu [1974] 34 STC 4. THE Tribunal, therefore, held that since tarpaulins are not goods specified in any of the schedules to the Gujarat Act, they should be subjected to tax under the residuary entry 13 of Schedule III thereof. THE appeal of the assessee was, therefore, dismissed. Being aggrieved with this order of the Tribunal, the assessee has, therefore, sought the reference of the question set out above to us for our opinion.
(3.) AT the outset we must refer to some debate which has taken place as to whether in view of the precise question referred to us where the scope of reference is restricted to the applicability of entry 18 (a) of Part A of Schedule II to the Gujarat and consequential consideration of entry 13 of Schedule III to the said Act in view of the non-applicability of entry 18 (a), it is open to the applicants to enlarge the scope of the reference by urging that the goods under consideration, namely tarpaulins, can be classified as cotton fabrics, and therefore, exempt from sales tax under entry 37 of Schedule I to the Gujarat Act. This controversy should not detain us any longer for obvious reasons. In the first place, the question which has been referred to us in Sales Tax Reference No. 12 of 1978, as set out hereinabove, requires us to answer whether the Tribunal was justified in holding, inter alia, that tarpaulins are covered by entry 13 of Schedule III to the Gujarat Act as held by the sales tax authorities. Now, entry 13 of Schedule III to the Gujarat Act is a residuary entry which takes in its sweep for purposes of subjecting the goods to tax all those goods other than those specified from time to time in section 18 and in Schedules I and II and the preceding entries of Schedule III. In order, therefore, to answer the question we must address ourselves to the basic question as to whether tarpaulins are classified or not under any of the entries of Schedules I, II and III. Unless we address ourselves to this question and answer it, it is not possible for us to advise the Tribunal on the question which has been referred to us. It cannot be gainsaid that the contention which has been urged before us on behalf of the assessee in both these references that tarpaulins must be classified as cotton fabrics under entry 37 was urged in terms before the Tribunal. The Tribunal has in the statement of case referring the question to us stated, inter alia, as under in para 3 : ". . . . . . . . . After referring to the definition of 'cotton fabrics' in item No. 19 of the First Schedule to the Central Excises and Salt Act, 1944, and finding that an article known as tarpaulin is prepared by superimposing the solution of wax and other chemicals on the canvas cloth and also further finding that the wax and other chemicals are not preparations of cellulose derivatives or other plastic materials as defined in item No. 19 of the First Schedules to the Central Excises and Salt Act, 1944, this Tribunal held that tarpaulins does not fall within the description of item No. 19 as referred to above. "