GENTLE, J. - (1.) THIS is a reference by the Board of Revenue, Bengal, pursuant to Section 21 of the Bengal Finance (Sales Tax) Act, 1941, and is made at the instance of the assessees. They are dealers in cloth, including Banarsi shawls and saris, and they claim the benefit given by Section 6 of the Act, which provides that no taxes shall be payable on the sale of goods specified in the first column of the Schedule. Item 16 of the Schedule is that which the assessees contend enables them to escape assessment of tax. It is in respect of hand-loom-woven cloth. In respect of some of the cloth, with which the assessees deal, after it has been finished and removed from the hand-loom, embroidery and other fancy work is made to it by hand; undoubtedly the addition considerably increases its value.
(2.) IT is argued that the provisions of Section 6 coupled with Item 16 of the Schedule apply to hand-loom cloth, no matter what may be done to it, or no matter by how much its value and the selling price may be increased so long as the cloth retains its identity and is not converted into some article such as a dressing grown or other piece of clothing. There are two questions raised in this reference, namely :- "(i) Whether the hand-loom-woven cloth, which, after it comes out of the loom, is subjected to needle work performed by hand or machine and thereby has its value increased, may still be regarded as hand-loom-woven cloth within the meaning of Item No. 16 of the Schedule of the Bengal Finance (Sales Tax) Act, 1941 ?" "(ii) Whether the Board can reject an application for revision under Section 20 of the Bengal Finance (Sales Tax) Act, 1941, without a hearing being granted to the petitioner ?"
(3.) SO far as the first question is concerned, in my opinion, the exception with respect to hand-loom-woven cloth applies only to that cloth simpliciter. If its value is increased, other work being carried out upon it, whether it be by hand or by machinery in the way of embroidery, tapestry or the like, then the cloth or the shawl or whatever it may be, is not as it comes from the hand-loom, is not hand-loom-woven cloth simpliciter, but becomes something more than that. In my opinion, the provisions of the section and Item 16 apply only to hand-loom-woven cloth which is sold in the same state in which it is when finished and removed from the loom. Therefore it follows that the answer to the first question is in the negative.;