- (1.) This petition seeks striking down of Haryana Act No. 10 of 1981 levying sales tax on ''dryer felts'' retrospectively from April 26, 1971 to September 6, 1978.
(2.) The case of the Petitioner is that it is a registered dealer under the provisions of the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956. During the relevant period the ''dryer felts'' were exempt from tax being covered under entry 30 of Schedule B which was a Schedule of tax-free goods. Though the contention of the Petitioner that ''dryer felts'' were covered by entry ''textiles'' in item 30 of Schedule B was not accepted by the statutory authorities and by this Court, the honourable Supreme Court in Porritts & Spencer (Asia) Ltd. v. State of Haryana, 1978 42 STC 433 upheld the said plea. It observed (pages 438 and 439 in 42 STC): The uses of textiles in a fast developing economy are manifold and it is quite common now to find 'textiles' being used even for industrial purposes. If we look at the Customs Tariff Act, 1975, we find in Chapter 59 occurring in section XI of the First Schedule that there is a reference to 'textile fabrics' and textile articles, 'of a kind commonly used in machinery or plant' and Clause (4) of that Chapter provides that this expression shall be taken to apply, inter alia, to 'woven textile felts ... of a kind commonly used in paper-making or other machinery...' This reference in a statute which is intended to apply to imports made by the trading community clearly shows that 'dryer felts' which are 'woven textile felts ... of a kind commonly used in paper-making machinery' are regarded in common parlance, according to the sense of ordinary traders and merchants textile fabrics. We have, therefore, no doubt that 'dryer felts' are 'textiles' within the meaning of that expression in item 30 of Schedule B.
(3.) To overcome the above judgment, the Haryana Legislature enacted the Haryana General Sales Tax (Amendment and Validation) Act No. 10 of 1981 amending entry 14 of Schedule B retrospectively excluding the expression ''dryer felts'' from ''textiles''. In view of the said amendment, the statutory revisional authority created demand of tax which was upheld by the Tribunal.;