Citation Codes

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citation codes

Case Number

Tax Revision Cases Nos. 20, 23 and 24 of 1959

Attorney(S)

For the Appellant: C. MALLIKHARJUNA RAO, K.VENKATA RAMAIAH, N. Ramamohan Rao, Advocates.

Judges

Chandra Reddy, C.J
Srinivasachari, J.

Acts

Madras General Sales Tax Act, 1939 and the Hyderabad General Sales Tax Act, 1950. T.R.C No. 20 of 1959
clause (v) of section 6 of the Hyderabad General Sales Tax Act. T.R.C No. 23 of 1959
sub-section 2-A of section 3 of the Madras General Sales Tax Act
clause (v) of section 6 of the Hyderabad General Sales Tax Act.

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Smart Summary

Structured Summary of Opinion delivered by Chandra Reddy, C.J.

Factual and Procedural Background

Three tax revision petitions raise a common question about the meaning of the word "cloth" as used in the Madras General Sales Tax Act, 1939 and the Hyderabad General Sales Tax Act, 1950. T.R.C. No. 20 of 1959 concerns the Madras Act; T.R.C. Nos. 23 and 24 of 1959 concern the Hyderabad Act.

In T.R.C. No. 20 of 1959 the respondents, a firm of merchants and dealers in cloth, sold fine and superfine printed sarees during 1956–1957 with a turnover of Rs. 25,949-11-0. The Deputy Commercial Tax Officer classified the sales under item 1 of sub‑section 2‑A of section 3 of the Madras General Sales Tax Act and levied sales tax. The assessee's appeal to the Deputy Commissioner failed; the Sales Tax Appellate Tribunal accepted the assessee's contention that sarees and dhoties fall within item 1 of section 3(2‑A) and allowed the appeal. The Department sought revision under section 22(1) of the Act and rule 40 of the Rules.

In T.R.C. Nos. 23 and 24 of 1959 the question was treated as analogous under clause (v) of section 6 of the Hyderabad General Sales Tax Act, 1950; there were notifications issued by the erstwhile Hyderabad Government exempting certain handloom sarees and dhoties below specified price thresholds, which were relied upon in argument in these matters.

Legal Issues Presented

What is the meaning of the word "cloth" (or "cotton‑cloth") as used in item 1 of section 3(2‑A) of the Madras General Sales Tax Act, 1939 and in clause (v) of section 6 of the Hyderabad General Sales Tax Act, 1950?
Whether sarees and dhoties (including fine and superfine printed sarees) are encompassed by the statutory expression "cloth" for purposes of taxation under the cited provisions?
Whether notifications exempting handloom sarees and dhoties below certain price thresholds affect the construction of the word "cloth" in the Hyderabad Act clause (v) or otherwise narrow its scope?

Arguments of the Parties

Petitioner's (Department's) Arguments

The Department contended that the Sales Tax Appellate Tribunal's distinction between "cloth" and "clothing" (excluding sarees and dhoties from "cloth") is not supported by the language of the statute.
It argued that the term "cotton‑cloth" is a generic term intended to comprehend dhoties and other varieties of cloth, including pieces sold as units.

Respondents' (Dealers') Arguments

The respondents' position was that the expression "cloth" should be confined to fabric sold by the yard and should not extend to fabric sold as a unit (i.e., articles manufactured or cut for a specific purpose such as sarees), and that material made or prepared for a specific purpose cannot be described as "cloth" in the statutory sense.
In T.R.C. No. 24 of 1959 the respondents additionally argued that a substantial part of the cloth they sold was priced below the statutory threshold (Rs. 2-8-0 per yard) and so should be excluded from clause (v) of section 6; they contended this factual aspect had not been investigated by the Tribunal and thus required further inquiry.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Firm Jaswanti Rai Jai v. Tax Officer (bench of the Allahabad High Court; citation text in opinion incomplete)	Distinction between "cloth" and "clothes/garments"; held that where cloth is cut and manufactured into specific articles (sarees, bed‑covers, etc.) those articles were garments not "cloth" for the purpose of the exemption under consideration.	The Court observed that the principle stated by the Allahabad Bench lends some support to the respondents' argument but rejected the broad proposition; the present Court did not accept that the classification should be so narrowly applied.
Kosuri Subha Raju v. The State of ? (1956 A.L.T. 574 = 1956 An. W.R. 709)	Consideration of whether a particular item (nawar‑tape) was included in the term "cloth"; discussion that "cloth" can be used in a wider or narrower sense, and that in wider sense it may take in every fabric woven of yarn or material and in narrow sense mean woven material used for garments.	The Court found that the statement of law in that case supports giving "cloth" a wide meaning; it did not assist the respondents in narrowing the term.

Court's Reasoning and Analysis

The Court approached the question primarily as one of statutory interpretation: whether the general word "cloth" should be given a narrow meaning (limited to fabric sold by the yard or to uncut fabric) or a broad meaning encompassing articles such as sarees and dhoties.

Key elements of the Court's reasoning, as stated in the opinion:

The Court rejected a narrow construction urged by the respondents (and by the Allahabad Bench in the cited decision) which would treat garments and articles cut or made to size as outside the term "cloth." Although the Allahabad decision offered some support to the respondents, the Court disagreed with its broad proposition.
The Court held that the Legislature used the term "cotton‑cloth" in a general sense and that in common parlance "cloth" is used to denote every fabric used for any purpose, including wearing apparel.
The Court considered dictionary definitions (Oxford English Dictionary, New International Dictionary, Twentieth Century Dictionary) which show that "cloth" is commonly used in a wide sense to include fabrics used for garments and coverings; the Court treated these definitions as confirming a broad construction.
The Court invoked a basic rule of statutory construction, cited from Bindra's Interpretation of Statutes referring to Crawford: general words should be given their full and natural meaning unless legislative intent indicates otherwise; general words are to be considered more broadly than specific words.
Applying these principles, the Court concluded that sarees and dhoties—even if sold as finished articles or as units—remain "cloth" within the statutory expression, because their use (wrapping or winding round; wearing apparel) falls within the ordinary meanings of "cloth."
With respect to the Hyderabad Act (clause (v) of section 6), the Court treated that clause as analogous to item 1 of section 3(2‑A) of the Madras Act and applied the same interpretive approach. The Court considered the Government notifications exempting certain handloom items but held those notifications did not alter the construction of clause (v); rather, the notifications appeared to clarify and specify exemptions and could not be used to construe the statute itself.
Regarding T.R.C. No. 24, the Court recognized a factual issue: respondents contended that some sales were below the statutory price threshold (Rs. 2-8-0 per yard) and that the Tribunal had not investigated this. The Court directed that the matter should go back to the Tribunal for further consideration or investigation on that factual point, and observed that if required the Tribunal could remit the matter to the assessing authority.

Holding and Implications

Holding (core rulings recorded in the opinion):

T.R.C. Nos. 20 and 23 of 1959: ALLOWED.

T.R.C. No. 24 of 1959: The opinion directs further inquiry by the Tribunal into the factual contention that part of the cloth was priced below the statutory threshold; the matter is to go back to the Tribunal for such investigation.

The printed final line in the opinion reads "T.R.C Nos. 20 and 23 of 1959 allowed. T.R.C No. 24 of 1959." The opinion text expressly records the allowance of Nos. 20 and 23 and, for No. 24, directs remand to the Tribunal for further factual inquiry; the final printed disposition for No. 24 in the provided text is incomplete and does not state any additional or different final adjudication beyond the remand instruction.

Immediate Consequences for the Parties

For T.R.C. No. 20 (Madras Act): The Department's revision succeeds and the Court holds that superfine sarees and dhoties are covered by the statutory term "cloth" in item 1 of section 3(2‑A), overturning the Tribunal's contrary decision.
For T.R.C. No. 23 (Hyderabad Act): The Court allows the revision, holding that the disputed turnover covering sales of sarees falls within the mischief of clause (v) of section 6.
For T.R.C. No. 24 (Hyderabad Act): The Court ordered that the factual question (whether part of the cloth was below Rs. 2-8-0 per yard and thus excluded from clause (v)) be investigated by the Tribunal; no order as to costs was recorded for that case.
Costs and fees: The opinion records that there will be no order as to costs in T.R.C. Nos. 23 and 24. In T.R.C. No. 20 of 1959 the advocate's fee (or similar fee) is fixed at Rs. 100 (text partially garbled but this figure appears in the opinion).

Broader Implications

The Court's ruling applies a general principle of statutory construction that broad, generic words like "cloth" are to be given their wide, ordinary meaning unless a contrary legislative intent appears. The Court explicitly declined to adopt a restrictive construction that would exclude garments or pieces sold as units (such as sarees and dhoties). The opinion notes that a narrow interpretation would render item 1 effectively otiose by excluding many common textile products (towels, bed‑sheets, table cloths, curtains, etc.).

The opinion does not purport to create a new precedent beyond applying settled rules of interpretation and existing case law and authorities; it concludes that the statutory expression "cloth" is to be construed broadly so as to include sarees and dhoties for the purposes of the cited sales‑tax provisions.

If any information was not available in the provided opinion

Certain portions of the printed opinion in the provided text were garbled or incomplete (indicated in the transcript by missing or obfuscated words). Where the final disposition text for T.R.C. No. 24 appeared incomplete in the supplied excerpt, the Court's clearer instructions in the body of the opinion (mandating remand to the Tribunal for factual inquiry) have been reported above. No other final, explicit dispositions beyond those quoted were available in the provided opinion text.

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Government Of Andhra Pradesh v. Pachipulsu Venkata Subba Rao, Vallamkonda Venkateswarlu

The Order of the Court was delivered by

Chandra Reddy, C.J

2. These three revision petitions raise a common question as to the meaning of the word ‘cloth’ used in the Madras General Sales Tax Act, 1939 and the Hyderabad General Sales Tax Act, 1950. T.R.C No. 20 of 1959 deals with the former Act while the other two revisions deal with the latter Act.

3. T.R.C No. 20 of 1959.—The respondents, a firm of merchants, are dealers in cloth. They sold fine and superfine printed sarees during the year 1956-1957, and the turnover amounted to Rs. 25,949-11-0 in this behalf. The Deputy Commercial Tax Officer, Vijayawada, treating the sales as falling under item 1 of sub-section 2-A of section 3 of the Madras General Sales Tax Act imposed sales tax at the rate of one anna six pies for every rupee of the turnover. The appeal of ??? assessee to the Deputy Commissioner of Commercial Tax proved unsuccessful. ??? assessee went in further appeal to the Sales Tax Appellate Tribunal. The Tribunal accepted the contention of the assessee that sarees and dhoties would embrace the definition contained in item 1 of section 3(2-A) of the Madras ??? Tax Act and allowed the appeal.

4. The Department seeks to revise this order under section 22(1) of the Act ??? rule 40 of the Rules. It is contended on behalf of the petitioner that the ??? made by the Sales Tax Appellate Tribunal between cloth and ??? clothing, covering sarees and dhoties is not borne out by the language of and that the word ‘cotton-cloth’ is a generic term comprehending dhotie ??? and other varieties of cloth. On the other hand, the stand taken by the ??? is that the expression ‘cloth’ is confined to fabric that is sold by yard and ??? extend to the fabric that is sold as a unit and that any material that is ??? specific purpose cannot be described as cloth.

5. Support is sought for this proposition in Firm Jaswanti Rai Jai ??? Tax Officer1. The question there was whether a dealer in printed cloth ??? handloom and mill-made, was entitled to the benefit of a notification which ??? empted the sale of cloth manufactured on handlooms with artificial silk ??? flax and cotton or wool from sales-tax. The dealer took handloom and mil cloth and then printed it and sold it as sarees, lihafs, fards, bed-covers, ??? Bench of the Allahabad High Court ruled that the word ‘cloth’ was to ??? from ‘clothes’ or garments and that what was exempted under ??? ??? was cloth and not clothes. The learned Judges added that ??? applicant did was to take handloom cloth and either cut it into specific size ??? have them manufactured into specific sizes, so that the pieces could be ??? sarees, bed-covers, lihafs, etc., and then to print them so that they could ??? used for the purpose for which they were meant and that the articles in ??? the applicant dealt were clothes or garments and not ‘cloth’. The principle ??? down by the learned Judges lends some support to the theory propounded by ??? learned counsel for the assessee. With great respect to the learned Judges, are unable to subscribe to the proposition so broadly stated. In our ??? ‘cotton cloth’ is comprehensive enough to take in sarees or dhoties. We feel ??? the Legislature has used it in a general sense. In common parlance, the word ‘cloth’ is used to denote every fabric used for any purpose including the use as a wearing apparel. The words ought to be understood in the widest sense and not in a narrow sense. Courts should adopt the meaning of a word which harmonises with the context and advances the policy of the Act. There is no obstacle here in giving the fullest meaning, especially when it carries out the object of the Act. If we interpret the word in a narrow and restricted sense as invited by the learned counsel for the respondents, it would be practically rendering item 1 otiose. It would exclude from its purview, if this test is applied, towels, bed-sheets, table cloths, curtain cloth, napkins and cloth used for every purpose sold as a unit. We do not think that such an intention could be attributed to the Legislature. That will be practically-reducing item 1 to a dead letter.

6. This view of ours accords with the meaning given by various dictionaries to the word ‘cloth’. Almost every dictionary that we have consulted shows that this word is used in a general sense. We will first refer to the Oxford English Dictionary, Volume If. The following meanings are given:

“A piece of pliable woven or felted stuff, suitable for wrapping or winding round, spreading or folding over, drying, wiping or other purpose; a swaddling or winding cloth, wrap, covering, veil, curtain, handkerchief, towel,

“A name given, in the most general sense, to every plain fabric woven, ??? or otherwise formed of any animal or vegetable (or even mine-???, as of wool, hair silk, the fibres of hemp, flax, cotton, asbestos, ??? glass, wire, etc. But when used without qualification or contextual ???, usually understood to mean a woollen fabric such as is used for ??? apparel. ‘A wearing apparel’.”

??? New International Dictionary, the following meanings are given,

??? A pliable fabric woven, felted or knitted from any filament; com-??? or woven cotton, woollen, silk, rayon, or linen, fibre, used for ???, etc.’ ‘The dress; raiment; also a garment’; ‘A piece or fabric of ???;’ ‘The Canvas for a painting’: ‘Livery’; ‘Uniform’.”

??? Twentieth Century Dictionary, the following meanings are

‘Woven material from which garments or coverings are made’; ‘A piece material’; ‘Clothing’; ‘The usual dress of trade or profession’.”

7. ??? thus seen that any fabric or material used for garments or wearing ??? within the definition of cloth. The judgment of Subba Rao, C.J, ??? was) and Viswanatha Sastri, J., in Kosuri Subha Raju v. The State of ??? . 1956 A.L.T 574= 1956 An. W.R 709 ??? does not render any assistance to the respondents. There, the question ??? nawar-tape was included in the term ‘cloth’ and the Bench answered. ??? negative. It was pointed out by Subba Rao, C.J, that ‘cloth’ designates ??? used for garments, coverings and such other purposes. The learned ??? Justice also observed that ‘cloth’ was used in a wider sense and also in a ??? sense, that in a wider sense it might take in every fabric woven of yarn ??? material and that in a narrow sense it connoted a woven material used for ??? or clothing. In our opinion this statement of law in a way supports the ??? have taken.

8. The very passage in Bindra's Interpretation of Statutes occurring at page 78 cited by Sri Ramamohana Rao furnishes an answer to his contention. The learned author refers to the rule stated by Crawford in his Interpretation of Statutes in these words:

“It is also a basic rule of construction that general words should be given a general construction; that is, they should be given their full and natural meaning, unless the statute in some manner reveals that the legislative intent was otherwise. Such a contrary intent may be found in the purpose and subject-matter. * * *

For example, a statute which provides for the taxation of all property of a certain kind, means all of such property that is within the jurisdiction of the taxing power.

Nevertheless the general rule may be announced that in the construction of statutes, general words are to be considered more broadly than specific words and specific words more narrowly than general words.”

9. Indisputably, the word ‘cloth’ is used in a general sense and, therefore, it has be construed broadly.

10. We are of opinion that the word ‘cloth’ is of wide connotation ??? dhoties, sarees, etc. We do not think that there is any warrant for ??? fabrics sold in yards. A ‘cloth’ does not cease to be ‘cloth’ merely ??? used as a dhoti or a sari. The use to which saris and dhoties are put falls ??? the scope of the expression ‘for wrapping or winding round’. It is clear ??? meanings given in the dictionaries that raiments and dress fall within ??? of ‘cloth’. It follows that sarees and dhoties of a superfine variety are ??? by the definition contained in item 1 of section 3, sub-section 2-A of the ??? General Sales Tax Act.

11. For these reasons, we allow the revision case of the Department ???

12. T.R.C Nos. 23 and 24 of 1959.—The principle enunciated in T.R ??? of 1959 covers these revisions also. Section 6, clause (v) of the ??? Sales Tax Act, 1950, is analogous to item 1 of section 3(2-A) of ??? General Sales Tax Act, 1939, though the rate under the former Act is ??? that under the latter Act. Clause (v) reads:

“So much of the turnover as is attributable to transactions in all ??? cloth made in mills or woven on power-looms-other than coarse and ??? cloth costing less than Rs. 2-8-0 per yard—shall be taxed at six ??? rupee at the first point of sale and at three pies at subsequent points.”

13. Here also the expression used is ‘cotton cloth’ and there is no ??? should be interpreted differently from that of item 1 of section 3(2-A) ??? Madras General Sales Tax Act. Sri Venkataramayya, counsel for the ??? in T.R.C No. 24 of 1959, invites our attention to certain notifications issue ??? the erstwhile Government of the Hyderabad State exempting from the ??? of sales-tax handloom dhoties and handloom sarees costing less than Rs. 3 ??? yard, to substantiate his contention that the word ‘cloth’ does not take in ??? The notification runs thus:

“In exercise of the powers conferred by section 7 of the Hyderal ??? General Sales Tax Act, 1950 (XIV of 1950) and in supersession of the ??? Department Notification No. 146/200/55-56.Tax, dated 12th March 1956, (Page 441, Part I-D, dated 22nd March, 1956), the Rajpramukh hereby exempts with effect from the first day of April 1956, the following goods from the payment of sales-tax: Handloom dhoties and handloom sarees costing less than Rs. 3 per yard.”

14. We do not think that this notification throws much light on the construction of clause (v) of section 6 of the Hyderabad General Sales Tax Act. We cannot also overlook the fact that on the same day another notification was issued exempting lungies, rumals, towels, bed-sheets and table cloth made on hand-looms and not stitched and costing Rs. 4 or less per piece. These two notifications between themselves practically exhaust all the varieties of handloom cloth. If all these types of handloom cloth were excluded from the definition of cloth we do not know what remains of the content of ‘cloth’. We think that these notifications were issued more by way of clarification. Further, section 6 cannot be construed with reference to the notification issued under section 7 of that Act. In our opinion, the disputed turnover in these cases which covers sales of sarees, falls within the mischief of clause (v) of section 6 of the Hyderabad General Sales Tax Act. T.R.C No. 23 of 1959 is therefore allowed. There will be no order ??? to costs.

15. So far as T.R.C No. 24 of 1959 is concerned, Sri Venkataramayya, learned ??? for the respondents, urges that the case of his clients was that a good part ??? cloth sold by them was less than Rs. 2-8-0 per yard and as such a part of ??? has to be excluded from the purview of clause (v) of section 6 ??? this matter has not been investigated by the Tribunal, it has to go back to ???. If the Tribunal feels that the matter should be investigated into ??? Department, it could send the matter to the assessing authority. There ??? no order as to costs in T.R.C No. 24 of 1959.

16. These Tax Revision Cases having been set down for being mentioned on this ??? Court made the following order.

17. ??? costs in T.R.C Nos. 23 and 24 of 1959. In T.R.C No. 20 of 1959 the ??? fee is fixed at Rs. 100.

18. ???

T.R.C Nos. 20 and 23 of 1959 allowed. T.R.C No. 24 of 1959.

Government Of Andhra Pradesh v. Pachipulsu Venkata Subba Rao, Vallamkonda Venkateswarlu

Structured Summary of Opinion delivered by Chandra Reddy, C.J.

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Petitioner's (Department's) Arguments

Respondents' (Dealers') Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Immediate Consequences for the Parties

Broader Implications

If any information was not available in the provided opinion

Government Of Andhra Pradesh v. Pachipulsu Venkata Subba Rao, Vallamkonda Venkateswarlu

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