ORDER
N.K. Jain, J.
1. All these three Misc. Petition Nos. 862 of 1991, 28 of 1993 and 1647 of 1993 have been heard as connected matters as a common question, purely of law, arises in these petitions.
2. M.P. No. 862 of 1991 arises from the order dated April 6, 1991 (annexure C) passed by the Commissioner of Sales Tax, M.P., Indore under Section 42-B of the M.P. General Sales Tax Act, 1958 (for short “the M.P. Act”), on a petition submitted by the petitioner-assessee on the form as prescribed under Rule 61-B seeking determination of the question as to whether “niwars” made of “mono filament yarn” is liable to sales tax under the Act of 1958 ? The Commissioner answered the question in affirmative, holding that only the niwars made up of cotton yarn are exempted from payment of tax under the State Government Notification No. F.A-3-21-1985 (24)-ST-V dated April 11, 1985 issued under Section 12 of the M.P. Act.
3. The other two petitions (Nos. 28 of 1993 and 1647 of 1993) arise out of the Notification No. l/90/16-B/One-3988, Indore, dated June 7, 1990, issued by the Commissioner of Sales Tax, M.P., Indore, directing levy of tax on the niwars made up of a material other than cotton yarn. It was further clarified that only niwars made from cotton yarn are covered by entry 25(iv) of the said notification dated April 11, 1985.
4. The question thus arises for determination in these petitions is : whether all kinds of niwars either made up of cotton yarn or any other yarn including mono filament yarn are exempted from payment of sales tax under the entry 25(iv) of the notification dated April 11, 1985 ?
5. I have heard Shri G.M. Chafekar, learned Senior Counsel appearing with Shri S.S. Samvatsar for the petitioners and Shri R.C. Mukati, learned Deputy Government Advocate for the respondents.
6. Section 12 of the M.P. Act provides that the State Government may, by a notification, exempt in whole or in part, any class of dealers or any goods or class of goods from payment of tax under the Act for such period as may be specified in the notification. The State Government issued the said notification dated April 11, 1985 under Section 12 of the M.P. Act. The notification and the entry 25 thereof, thus read as under :
“No. F.A. 3-21-1985(24)/-ST-V, dated the 11th April, 1985 :
In exercise of the powers conferred by Section 12 of the Madhya Pradesh General Sales Tax Act, 1958 (No. 2 of 1959), the State Government hereby exempt from the 1st April, 1985 to 31st March, 1988 the class of goods specified in column (2) of the Schedule below from the payment of tax under Section 6 and/or Section 7 of the said Act to the extent specified in column (3), subject to the restrictions and conditions specified in column (4) of the said Schedule :
Entry 25. (i) Staple fibre cloth ;
(ii) Handkerchiefs, towels, napkins, dusters made of cotton, rayon, artificial silk, woollen fabrics, staple fibre cloth or admixture of any two or more of the fabrics ;
(iii) Velvets and velveteens ;
(iv) Tapes, niwars and laces ;
(v) Hosiery cloth in length ; and
(vi) Embroidered cloth.
Note.– The aforesaid goods do not include silk fabrics and articles made thereof, durries, carpets, druggets and finished items of hosiery such as sweaters, socks, mufflers etc.”.
7. Clause (iv) of entry 25 deals with tapes, niwars, and laces, the word “niwars” has been used in plural without any qualifying clause so as to indicate that the exemption would be applicable to a particular kind of niwars made up to a particular material. It is well-settled that the words used in exemption clauses must be construed not in any technical sense nor from the botanical point of view, but they have to be understood in their common parlance. It is also well-settled that such words be interpreted according to their popular sense, meaning thereby that sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it. [See : Porritts & Spencer (Asia) Ltd. v. State of Haryana [1978] 42 STC 433 (SC)].
8. In Atul Glass Industries (P.) Ltd. v. Collector of Central Excise [1986] 63 STC 322, the apex Court laid down following test to be applied in such cases :
“The test commonly applied to ascertain whether a marketable product falls within a specific item in Schedule I to the Central Excises and Salt Act, 1944, is : How is the product identified by the class or section of people dealing with or using the product ? It is generally by its functional character that the product is so identified. It is a matter of common experience that the identity of an article is associated with its primary function. It is only logical that it should be so. When a consumer buys an article, he buys it because it performs a specific function for him. There is a mental association in the mind of the consumer between the article and the need it supplies in his life. It is the functional character of the article which identifies it in his mind.”
9. This Court in M.P. No. 1166 of 1990 (Shyam Winding Factory v. State of Madhya Pradesh), decided on January 3, 2000 Reported in [2000] 120 STC 488 (MP), while dealing with the same entry 25(iv) with reference to the word “tapes” used therein, has held that the expression “tapes” specified in entry 25(iv) would include elastic tapes and is, accordingly exempted from payment of sales tax by virtue of the said notification for the period mentioned therein.
10. A perusal of entry 25(iv) as extracted above would indicate that what is exempted from payment of sales tax are tapes, niwars and laces. In my considered opinion the use of expression “niwars” admits no qualification and it means all types of niwars irrespective of the material used in preparing those niwars. The emphasis is on the ultimate product, i.e., niwars not on the raw material used in preparing those niwars. The product is identified by the people using that product by its use not by its contents. The functional character of niwars is not changed by use of “mono filament yarn”. The functional character of niwars would remain the same whether it is made up of cotton yarn or of mono filament yarn. Lord Denning in his classic words as extracted by the Supreme Court in Dr. P. Nalla Thampy Them v. B.L. Shanker AIR 1984 SC 135, said :
“A judge must not alter the material of which the Act is woven, but he can and should iron out the creases.”
In the instant case there are no creases and the legislative intent is clear. What was intended in the said notification was to exempt all kinds of niwars irrespective of their properties and the material used in preparing the same. The view taken by the learned Commissioner, Sales Tax was wrong.
11. In the result, I allow all these three petitions. The impugned order dated April 6, 1991 (vide annexure C in M.P. No. 862 of 1991) as also the notification dated June 7, 1990 (vide annexure P/2 in M.P. No. 28 of 1993 and annexure P/3 in M.P. No. 1647 of 1993) are quashed. Accordingly, the question as extracted above is answered in affirmative, i.e., in favour of the petitioners-assessees and against the Revenue. No order is, however, made as to the coats of these petitions. The amount of security, if any, be refunded to the petitioners.
This order be retained in M.P. No. 862 of 1991 and a copy each be kept in M.Ps. Nos. 28 of 1993 and 1647 of 1993.