STATE OF A P Vs. GOODYEAR INDIA LTD

JUDGEMENT

(1.) THE contention urged by the learned Government Pleader for Commercial Taxes in this T. R. C. is that the Tribunal was in error in holding that the transmission beltings are cotton fabrics within the meaning of entry 5 of the Fourth Schedule to the A. P. General Sales Tax Act and, therefore, exempt from tax. According to him, the transmission beltings are not cotton fabrics. Let us first see how the transmission beltings are manufactured. Even according to the Deputy Commissioner who revised the order of the Commercial Tax Officer and held that they are not cotton fabrics, they are manufactured with cotton and superimposed with rubber. The question is whether they can be called "cotton fabrics". Entry 5 of the Fourth Schedule reads as follows :

(2.) BECAUSE of the explanation, we have to notice item 19 (1) of the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957. It reads thus : " 19. (1) Cotton fabrics, other than (i) embroidery in the piece, in strips or in motifs, and (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials - (a) Cotton fabrics, not subjected to any process. Twenty per cent ad valorem (b) Cotton fabrics, subjected to the process of Twenty per cent bleaching, mercerising, dyeing, printing, ad valorem. " water - proofing, rubberising, shrink - proofing, organdie processing or any other process or any two or more of these processes. (This entry was substituted by the Amendment Act of 1980 with restrospective effect from 1st March, 1955.)

(3.) APPLYING the above test, there can be little doubt that the transmission beltings herein are certainly cotton fabric. It appears from the judgment of the Tribunal that these transmission beltings contain 66. 7 per cent cotton and that the remaining 33. 3 per cent content is rubber. This is evidenced from the test certificate issued by the Government of India, National Test House, Alipur, Calcutta. In other words, it is a cotton fabric subjected to a process of rubberising. Applying the test of predominance also, it must be held that it is cotton fabric. We, therefore, agree with the Tribunal that it is "cotton fabric" within the meaning of entry 5 of the Fourth Schedule to the Act and, therefore, exempt from tax.