S.K. Mishra, J
1. The simple question that arose for determination in this commercial tax revision, filed under Section 55 of the Uttarakhand Value Added Tax Act,
2005 (hereinafter referred to as the Uttarakhand VAT Act 2005), is as follows:-
Whether ‘non-woven fabric’ is ‘textile’ or not and whether non-woven fabric shall fall within Entry 5 Schedule II of the aforesaid Act?
2. In this revision, the manufacturer has assailed the final order and judgment dated 09.07.2014, passed by the Commercial Tax Tribunal, Uttarakhand,
Dehradun, in Second Appeal No. 2 of 2014, confirming the advance ruling passed by the learned Commissioner, Commercial Tax, Dehradun on
25.03.2014 on application no. 9648 dated 02.12.2013. The revisionist engaged in the production of non-woven fabric and other articles. For the
assessment year 2006-07, it file an application before the learned Commissioner, Commercial Tax, Dehradun, for an advance ruling that it shall be
included in the definition of fabric as mentioned in Entry 5 Schedule II of the Uttarakhand VAT Act, 2005. The learned Commissioner, Commercial
Tax, Dehradun by virtue of his impugned order dated 25.03.2014 relying upon the judgment passed by the Commercial Tax Tribunal on 10.12.2007,
treated non-woven fabric as other material and not as a fabric. It was challenged before the Tribunal and the Tribunal relied upon the definition given
in the Wikipedia and came to the conclusion that it does not come within the definition of ‘textile’ as provided under the Uttarakhand VAT Act,
2005. For the purpose of better understanding we take note of the exact definition given in Entry No. 164, which reads as follows:-
“All other varieties of Textile fabrics and made ups as are specifically not covered by any entry of any of the Schedules to the Act.â€
3. It is not disputed at this stage that non-woven fabric is not specifically covered by any entry of the schedule to the Act. The only question that
remains to be decided whether non-woven fabric will be included in the expression textile and shall subject to taxation of Entry No. 5 Schedule II to
the Act.
4. Mr. Arvind Vashistha, the learned Senior Counsel appearing for the revisionist would rely upon the reported case of Porritts & Spencer (Asia)
Ltd. vs. State of Haryana, (1979)1 SCC 82, wherein the Hon’ble Supreme Court had the occasion to decide whether dryer felts “is textileâ€
under Item 30 Schedule B of the Punjab General Sales Tax Act, 1948 and whether it is exempted under Section 6 of the aforesaid Act. After taking
into consideration various judgments, the Hon’ble Supreme Court has at paragraph 6 given a very exhaustive discussion and held that dryer felt is
textile. We find it appropriate to quote the exact words used by the Hon’ble Supreme Court in the said case, which reads as follows:-
“6. Now, what are 'dryer felts' ? They are of two kinds, cotton dryer felts and woollen dryer felts. Both are made of yarn, cotton in one
case and woollen in the other. Some synthetic yarn is also used. The process employed is that of weaving according to warp and woof
pattern. This is how the manufacturing process is described by the assessing authority in its order dated November 12, 1971 ""the raw
material used by the company is cotton and woollen yarn which they themselves manufactured from raw cotton and wool and the finished
products called 'felts' are manufactured on power looms from cotton and woollen yarn."" 'Dryer felts' are, therefore, clearly woven fabrics
and must be held to fall within the ordinary meaning of the word 'textiles'. We do not think that the word 'textiles' has any narrower
meaning in common parlance other than the ordinary meaning given in the dictionary, namely, a woven fabric. There may be wide ranging
varieties of woven fabric and they may go on multiplying and proliferating with new developments in science and technology and inventions
of new methods"" materials and techniques, but nonetheless they would all be textiles. The analogy of cases where the word 'vegetables' was
held not to include betel leaves or sugar-cane is wholly inappropriate. There, what was disapproved by the Court was resort to the botanical
meaning of the word 'vegetables' when that word had acquired a popular meaning which was different. It was said by Holmes, J., in his
inimitable style: ""A word is not a crystal, transparent and unchanged; it is the skin of a living thought and may vary greatly in colour and
content according to the circumstances and the time in which it is used."" Where a word has a scientific or technical meaning and also an
ordinary meaning according to common parlance, it is in the latter sense that in a taxing statute the word must be held to have been used,
unless contrary intention is clearly expressed by the Legislature. The reason is that as pointed out by Story, J., in 200 Chests of Tea (supra),
the Legislature does ""not suppose our merchants to be naturalists, or geologists, or botanists"". But here the word 'textiles' is not sought by
the assessee to be given a scientific or technical meaning in preference to its popular meaning. It has only one meaning, namely, a woven
fabric and that is the meaning which it bears in ordinary parlance. It is true that out minds are conditioned by old and antiquated notions of
what are textiles and, therefore, it may sound a little strange to regard 'dryer felts' as 'textiles': But it must be remembered that the concept
or 'textiles' is not a static concept. It has, having regard to newly developing materials, methods, techniques and processes, a continually
expanding content and new kinds of fabric may be invented which may legitimately, without doing any violence to the language, be
regarded as 'textiles'. Take for example rayon and nylon fabrics which have now become very popular for making wearing apparel. When
they first came to be made, they must have been intruders in the field of 'textiles' because only cotton, silk and woollen fabrics were till then
recognized as 'textiles'. But today no one can dispute that rayon and nylon fabrics are textiles and can properly be described as such. `We
may take another example which is nearer to the case before us. It is common knowledge that certain kinds of hats are made out of felt and
though felt is not ordinarily used for making wearing apparel, can it be suggested that felt is not a 'textile' ? The character of fabric or
material as textile does not depend upon the use to which it may be put. 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 Xl 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'.
5. The reasoning given by the Commercial Tax Tribunal is very emphatically supported by the learned Brief Holder in this case by advancing his
argument that non-woven fabric is not used as cloth for human use, and, therefore, it cannot be termed as textile. This argument, advanced by the
learned Brief Holder as well as resorted to by the learned Commercial Tax Tribunal is erroneous on the fact of it because of the observation of the
Hon’ble Supreme Court quoted supra that the character of a fabric or material as textile does not depend upon the use to which it is put. 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.
6. In that view of the matter, we are of the opinion that the learned Commissioner, Commercial Tax as well as the Commercial Tax Tribunal
committed error on record by holding that non-woven fabric is not textile.
7. Another aspect of the case is that the Tribunal committed an error by misinterpreting the definition of non-woven fabric available in Wikipedia. In
the case of Ponds India Limited vs. Commissioner of Trade Tax, Lucknow (2008) 8 SCC 369 while deciding the definition of cosmetics and
drugs, the Hon’ble Supreme Court has taken into consideration common use of a word and resorted to a definition appearing at Wikipedia. The
Hon’ble Supreme Court held in para no. 41 that Wikipedia, like all other external aids to construction, like dictionaries etc. is not an authentic
source, although the same may be looked at for the purpose of gathering information. Where an express statutory definition of a word exists, a Wiki
definition cannot be preferred. However, it further held that it cannot normally be used for the purpose of interpreting a taxing statute or classification
of a product, vis-à -vis, an entry in the statute. However, in the subsequent paragraph, the Hon’ble Supreme Court held that as a source of
authority, Wikipedia is frequently cited by Judges around the world. This is not restricted to India alone. The Hon’ble Supreme Court further held
that the New York Times reports that beginning in 2004 more than 100 opinions in the States have cited Wikipedia, including 13 from the Federal
Appeals Courts.
8. Thus, it is clear that the word fabric has not been defined in the VAT Act, and, therefore, the common meaning used in the common parlance has
been taken into consideration and in that case Wiki definition can also be looked into. The Wiki definition provides as follows:-
“Non-woven fabric is a fabric like material made from staple fibre (short) and long fibres (continuous long), bonded together by chemical,
mechanical, heat or solvent treatment. The term is used in the textile manufacturing industry to denote fabrics, such as felt, which are neither woven
nor knitted.â€
9. Thus, it is clear that Wiki definition includes ‘felt’ as non-woven fabric and as per the reported judgment of Porritts & Spencer (supra),
‘felt’ has been treated as textile.
10. Having considered the entire material on record, we are of the opinion that the word textile cannot be given a restrictive meaning and with the
development of science and technology and expansion of economy and industry, materials which are not textile, in the traditional sense, like cotton or
silk, should also be treated as textile and the benefit in taxing issues available to the traditional textile should also be made applicable to such non-
woven fabrics.
11. In the result, the revision is allowed. The order dated 25.03.2014 passed by the learned Commissioner, Commercial Tax, Dehradun and judgment
and order dated 09.07.2014 passed by the Commercial Tax Tribunal, Uttarakhand are hereby set aside. The advance ruling is made in favour of the
revisionist holding that ‘non-woven fabric’ shall come within the definition of ‘textile under’ the VAT Act. There shall be no order as to
the costs.
Urgent certified copy of this judgment be provided as per rules.
