Case Note & Summary
The Textile Committee, a statutory body under the Textile Committee Act, 1963, filed a writ petition challenging an order of the Textile Committee Cess Appellate Tribunal dated 18.11.2004. The tribunal had held that no cess was payable on textiles manufactured from waste cotton, relying on a notification dated 18.9.1978 issued by the Central Government under Section 5 of the Act. The respondent, Saibaba Cotton Waste Spinning Mills, produces yarn from waste cotton. The petitioner argued that the exemption should not apply to yarn. The High Court, after hearing counsel, upheld the tribunal's order, finding that the notification clearly exempts textiles manufactured from waste cotton, which includes yarn. The court noted that there were 400 similar matters pending before the tribunal, and this decision would guide those cases. The petition was dismissed, and the rule was discharged.
Headnote
A) Textile Law - Cess Exemption - Notification under Section 5 - The issue was whether yarn produced from waste cotton is exempt from cess under the Textile Committee Act, 1963. The appellate tribunal held that textile manufactured from waste cotton is exempt based on a notification dated 18.9.1978. The High Court upheld the exemption, interpreting the notification to cover all textiles including yarn made from waste cotton. (Paras 1-2)
Issue of Consideration
Whether yarn manufactured from waste cotton is exempt from payment of cess under the Textile Committee Act, 1963 by virtue of the notification dated 18.9.1978 issued under Section 5 of the Act.
Final Decision
The High Court dismissed the petition and upheld the order of the appellate tribunal. The rule was discharged.
Law Points
- Interpretation of exemption notification
- Cess liability on textiles manufactured from waste cotton
- Scope of Section 5 of Textile Committee Act
- 1963
Case Details
2006 LawText (BOM) (11) 19
Writ Petition No. 1536 of 2005
F.I. Rebello, Anoop V. Mohta
B.R. Palav with Radha J. Iyer i/by Amarchand & Mangaldas & S.A. Shroff & Co. for Petitioner, Nitin Mule i/by G.S. Godbole for Respondent No. 1
Shri. Saibaba Cotton Waste Spinning Mills, The Textile Committee Cess Appellate Tribunal, Union of India
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Nature of Litigation
Writ petition challenging order of appellate tribunal regarding cess exemption.
Remedy Sought
Petitioner sought to quash the order of the appellate tribunal dated 18.11.2004.
Filing Reason
The appellate tribunal held that no cess was payable on textiles manufactured from waste cotton, which the petitioner disputed.
Previous Decisions
The appellate tribunal by order dated 18.11.2004 relied on notification dated 18.9.1978 and held that textile manufactured from waste cotton, no cess was payable.
Issues
Whether yarn manufactured from waste cotton is exempt from cess under the Textile Committee Act, 1963.
Submissions/Arguments
Petitioner argued that the exemption should not apply to yarn.
Respondent No. 1 raised preliminary objection that the petition was only one of many similar matters.
Ratio Decidendi
The notification dated 18.9.1978 issued under Section 5 of the Textile Committee Act, 1963 exempts all textiles manufactured from waste cotton, including yarn, from payment of cess.
Judgment Excerpts
The appellate authority by the impugned order dated 18.11.2004 relied on the notification dated 18.9.1978 issued by the Central Government in exercise of its powers under Section 5 of the Act and held that textile manufactured from waste cotton, no cess was payable.
Procedural History
The Textile Committee made a demand for cess on Respondent No. 1. Respondent No. 1 appealed to the Textile Committee Cess Appellate Tribunal, which allowed the appeal on 18.11.2004. The Textile Committee then filed the present writ petition in the High Court.
Acts & Sections
- Textile Committee Act, 1963: Section 5
