Chittatosh Mookerjee, J. - (1.) The petitioner-company is a manufacturer of various kinds of textile goods. Its 1factories are situated at Delhi. It sells articles manufactured in its factories in different places in West Bengal and it is a registered dealer under the Bengal Finance (Sales Tax) Act, 1941.
(2.) The Commercial Tax-Officer, Central Section, West Bengal, made an assessment order for the four quarters ending 30th June, 1962, in respect of the petitioner's business [vide annexure D to the petition). The Commercial Tax Officer by his assessment order disallowed the claim of the petitioner for exemption from payment of tax under Section 5(2) (a) (vi) of the Bengal Finance (Sales Tax) Act read with Rule 3(28) of the Sales Tax Rules in respect of sales of stitched bed-sheets and stitched towels amounting to Rs. 1,44,198.13. The Commercial Tax Officer refused to accept the contention of the petitioner-company that the above items were cotton fabrics and subject to the levy of excise duty. The Commercial Tax Officer accordingly disallowed the said claim for deduction and included a sum of Rs. 1,44,198.13 within the petitioner's taxable turnover for the period in question and assessed tax thereupon.
(3.) The petitioner-company being aggrieved by the said assessment order dated 8th June, 1966, preferred an appeal under Section 20(1) of the Bengal Finance (Sales Tax) Act, 1941. The Assistant Commissioner, Commercial Taxes, Calcutta (South) Circle, dismissed the said appeal. The Assistant Commissioner upheld the views of the Commercial Tax Officer that the petitioner was not entitled to get exemption from payment of sales tax upon the sale proceeds of bed-spreads, bed-sheets, towels and napkins. According to the Assistant Commissioner, the said items were stitched materials and not "cotton fabrics" and, therefore, the petitioner could not claim benefit of exemption under Rule 3(28) of the Sales Tax Rules.;