The Commissioner, Trade Tax vs S/s Ravel Baton Store

Rajes Kumar, J.—Present revision u/s 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 06.04.2004 relating to the assessment year 1990-91 under Central Sales Tax Act.

The short question involved in the present revision relates to the taxability of artificial silk yarn. Dealer/opposite party (hereinafter referred to as "Dealer") clamed that the artificial silk yarn is silk yarn and, therefore, exempted from tax under notification No. ST-671-11-9(231)/94-U.P. Act No. 15-40-Order-2000, dated 26.02.2000. The claim of the revenue is that it is not silk yarn and liable to tax as an unclassified item. Tribunal held that artificial silk yarn is silk yarn and, therefore, exempted from tax.

Heard learned Counsel for the parties.

Learned Standing Counsel submitted that artificial silk yarn and silk yam are two different commodities. According to him only pure silk yarn is covered under silk yarn and not artificial silk yarn.

I do not find any substance in the argument of learned Standing Counsel.

Entry of the Notification No. ST-671, dated 26 02.2000 read as follows:

silk, silk fabric, silk mixed cotton and pure silk.

Silk yarn is not qualified by the word "pure" as it qualifies silk. Thus, the word "pure" can not be read with silk yarn. The Legislature has not used the word "pure" with silk yarn. It is settled principal of law that natural meaning of the word should be given, if there is no ambiguity. The word "silk yarn" is used in a generic sense and includes both the artificial silk yarn as well as pure silk yarn. There is no reason to restrict the word "silk yarn" to the "pure silk yarn" and not to include artificial silk yarn. Wherever Legislature intended it has used the word "pure" along with commodity like, pure silk.

A similar question came up for consideration before the Orissa High Court in the case of Bargarh Yarn Traders v. State of Orissa reported in 90 STC 387. Before the Orissa High Court also the question was whether silk yam includes artificial silk yarn Division Bench of Orissa High Court held that silk yarn includes artificial silk yarn. Orissa High Court held as follows:

Applying the ordinary principle of construction of statute referred to earlier when we consider to find out the meaning of the expression "silk yarn" used in item 100 of the list of goods subject to levy of sales tax and item 7 of the exempted list, we see no reason or justification to give it a restricted meaning by not including artificial silk yarn within the same and in our opinion, the expression would include within Itself both "pure silk yarn" as well as "artificial silk yarn.

The matter can be examined from another angle also. In the list of goods subject to levy of sales tax, item 81, it has been stated that silk goods including all mill-made or power-loom woven pure silk fabrics and pure silk cloth of handloom origin but excluding khadi silk cloth. In the list of goods of exempted items against item No. 16 handloom or powerloom woven cloth "- of all kinds excepting cloth made from pure silk,. of handloom origin has been sued. Similarly in item 22 mill-made fabrics made wholly or partly of cotton, staple fibre, rayon, artificial silk or wool including processed fabrics made in the processing mils have been described. Therefore in some of the items either "artificial silk" or "pure silk" have been specifically indicated But so far, as the "yarn" is concerned, the expression used is "silk yarn " and this indicates that it was intended to bring within it both pure silk yarn as well as artificial silk yarn. Even applying the common parlance test or the test as to how the goods are nown in the industry, we are also of the opinion that the expression "silk yarn" would include within itself both pure silk yarn as well as artificial silk yarn. In the premises, as aforesaid, we are of the considered opinion that the expression "silk yarn " has been used in a generic sense and both the artificial silk yarn as well as the pure silk yarn would be covered by the said expression.

SLP (Civil) No. 18033 of 1991 against the aforesaid decision of the Orissa High Court has been dismissed by the Apex Court on 09.12.1991

Respectfully following the aforesaid decision of the Orissa High Court referred hereinabove, it is held that silk yarn includes both pure silk yarn as well as artificial silk yarn. Order of the Tribunal is accordingly, upheld.

In the result, revision fails and is accordingly, dismissed.