ARIJIT PASAYAT, C.J.

As these revision applications under section 41 of the Kerala General Sales Tax Act, 1963 (in short, "the Act") raise a common question, they are taken up together and shall be governed by this judgment.

The question relates to taxability of tarpaulin. In each case, the judgment of the Kerala Sales Tax Appellate Tribunal of different Benches (hereinafter referred to as "the Tribunal" for sake of convenience) is assailed. Though the assessment orders are relatable to different assessment years, there is practically no difference so far as the position in law to be decided is concerned. The assessment years concerned in different cases are 1986-87 to 1993-94. According to the assessee, tarpaulin is encompassed by the expression "cotton fabrics" falling under item No. 7 (up to March 31, 1992) and item No. 11 (from April 1, 1992) of the Third Schedule to the Act and, therefore, exempted from tax. Alternatively, it is submitted that tarpaulin being one of the goods of special importance (declared goods), levy of tax thereon and at the rate prescribed cannot be maintained. The Revenues stand, on the other hand, is that tarpaulin is liable to be taxed as unclassified item at multi-point up to 1983-84, and thereafter as an item classified under the First Schedule at first point inside the State. From July 1, 1987 to March 31, 1992, it was covered by item No. 152 and from April 1, 1992, it is covered by item No. 106.

The only question that, therefore, needs adjudication is whether sale of tarpaulin is exigible to tax. For answering this question, it would be proper to take note of legislative history of a few items in Schedules I and III. There was no specific entry for tarpaulin till March 31, 1984. It was classified as a separate item under item No. 100C of the First Schedule, taxable at 8 per cent at point of first sale in the State with effect from April 1, 1984. The said position continued till June 30, 1987. The item was re-numbered as 152 with effect from July 1, 1987 and read "PVC cloth, water-proof cloth, rexine and their products and tarpaulin". The rate continued to be 8 per cent at the point of first sale. This item continued till July 31, 1991. "PVC cloth" was omitted therefrom by the Kerala Finance Act, 1991 (in short "the 1991 Act") with effect from August 1, 1991. No change in any other item, rate, point of levy was made. This was the position till March 31, 1992 as amended by the Kerala Finance Act, 1992 (in short "the 1992 Act"). The new item No. 106 reads as "Rain coat, tarpaulin and products of water-proof cloth, rexine and PVC cloth". The rate of tax has been increased to 10 per cent, with no change in the point of levy. According to the Revenue, tarpaulin falls under item No. 100C or 152, as the case may be, taxable at 8 per cent at the first point of sale in the State from April 1, 1984 to March 31, 1992. It falls under item No. 106 with effect from April 1, 1992 taxable at the rate of 10 per cent at the point of first sale in the State. So far as the periods prior to April 1, 1984 are concerned, it is to be noted that there was no specific entry for tarpaulin in the Schedules to the Act. Exemption is claimed by the assessee on the ground that tarpaulin is encompassed by expression "cotton fabrics" coming under item No. 7 of the Third Schedule to the Act.The assessees stand is that tarpaulin is 100 per cent cotton cloth and consequently exempted from payment of tax as an item falling under item No. 7 or 11 of the Third Schedule to the Act (as the case may be). Schedule III deals with "goods exempted from tax" under section 9 of the Act. Item No. 7 or 11 (as the case may be) on which reliance is placed by the assessee reads as follows :

"Item No. 7 : Cotton fabrics, woollen fabrics and rayon or artificial silk fabrics as defined in items Nos. 19, 21 and 22 respectively of the First Schedule to the Central Excises and Salt Act, 1944.

Item No. 11 : (i) Cotton fabrics covered under heading Nos. 52.05, 52.06, 52.07, 52.08, 52.09, 52.10, 52.11, 52.12, 58.01, 58.02, 58.03, 58.04, 58.05, 59.01, 59.03, 59.05, 59.06 and 60.01 of the Schedule to the Central Excise Tariff Act, 1985 (Central Act 5 of 1986).

(ii) Man-made fabrics covered under heading Nos. 54.08, 54.09, 54.10, 54.11, 54.12, 55.07, 55.08, 55.09, 55.10, 55.11, 55.12, 58.01, 58.02, 58.03, 58.04, 58.05, 58.06, 59.06 and 60.01 of the Schedule to the Central Excise Tariff Act, 1985 (Central Act 5 of 1986).

(iii) Wooven fabrics of wool covered under heading Nos. 51.06, 51.07, 58.01 and 58.06 of the Schedule to the Central Excise Tariff, Act, 1985 (Central Act 5 of 1986).

Excluding PVC cloth, rexine and water-proof cloth on which duty is not levied under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (Central Act 58 of 1957)."

Item No. 19 (dealing with cotton fabrics) of the First Schedule to the Central Excises and Salt Act, 1944 (in short the Central Excise Act") is extracted below :

"19. Cotton fabrics means all varieties of fabrics manufactured either wholly or partly from cotton and includes dhoties, sarees, chadders, bed-sheets, bed-spreads, counterpanes, table-cloths, embroidery in the piece, in strips or in motifs and fabrics impregnated or coated with preparations of cellulose derivatives or of other artificial plastic materials but does not include any such fabric if it contains -(i) 40 per cent or more by weight of wool;

(ii) 40 per cent or more by weight of silk

(iii) 60 per cent or more by weight of rayon or artificial silk; or

(iv) 50 per cent or more by weight of jute (including Bimlipatam jute or mesta fibre) :

Provided that in the case of embroidery in the piece, in strips or in motifs and fabrics impregnated or coated with preparations of cellulose derivatives or of other artificial plastic materials, the percentages referred to in (i) to (iv) above shall be in relation to the base fabrics which are embroidered or impregnated, or coated as the case may be ........."

It is to be noted that sale of tarpaulin was exempted by virtue of a notification issued under section 10 of the Act (S.R.O. No. 342 of 1963). That was withdrawn with effect from June 1, 1974. First Schedule to the Act was substituted with effect from July 1, 1987 by the Finance Act 18 of 1987. Prior to that, with effect from April 1, 1986, by the Finance Act 7 of 1986, item No. 100C was introduced to the Schedule. The same reads as follows :

"100C : PVC cloth, water-proof cloth, rexine and their 8 per cent." products and tarpaulin

Thereafter, Schedule I was substituted by the Finance Act 18 of 1987 with effect from July 1, 1987, as stated above. In the substituted Schedule, item No. 152 reads as follows :

"152 : P.V.C. cloth, water-proof cloth, rexine and their 8 per cent." products and tarpaulin

Schedule I again underwent change with effect from April 1, 1992 whereby the relevant item was renumbered as item No. 106 and it reads as follows :

"106 : Rain coat, tarpaulin and products of water-proof 10 per cent." cloth, rexine and PVC cloth

The first limb of the question to be adjudicated is the effect of item No. 7 or 11, as the case may be, in Schedule III. The effect of the words "cotton fabrics" as defined in the Central Excise Act in respect of item No. 7 or 11 of the Third Schedule to the Act has to be considered in the back-ground as to whether they are words of definition or word of incorporation. To appreciate contentions urged, it is necessary to make a brief reference to the principles of interpretation of an enactment which, for purposes of convenience, refers to or incorporates a provision of another. These have been discussed in various decisions, viz., Secretary of State v. Hindustan Co-operative Insurance Society Ltd. AIR 1931 PC 149 [LQ/PC/1931/46] ; 1931 58 IA 259; Collector of Customs, Madras v. Nathella Sampathu Chetty 1962 3 SCR 786 [LQ/SC/1961/321] ; Ram Sarup v. Munshi 1963 3 SCR 858 [LQ/SC/1962/291] ; Ram Kirpal Bhagat v. State of Bihar 1970 3 SCR 233 [LQ/SC/1969/467] ; New Central Jute Mills Co. Ltd. v. Assistant Collector of Central Excise 1971 2 SCR 92 [LQ/SC/1970/346] ; State of Madhya Pradesh v. M. V. Narasimhan 1976 1 SCR 6 [LQ/SC/1975/218] ; Bajya v. Gopikabai 1978 3 SCR 561 [LQ/SC/1978/123] ; Mahindra and Mahindra Ltd. v. Union of India 1979 2 SCR 1038 [LQ/SC/1979/59] and Western Coalfields Ltd. v. Special Area Development Authority 1982 2 SCR 1. [LQ/SC/1981/439] It is unnecessary to make a detailed reference to these decisions. It is sufficient to say that they draw a distinction between referential legislation which merely contains a "reference to, or citation of, a provision of another statute and a piece of referential legislation which incorporates within itself a provision of another statute. In the former case, the provision of the second statute, along with all its amendments and variations from time to time, should be read into the first statute. In the latter case, the position will be as outlined in Narasimhans case 1976 1 SCR 6 [LQ/SC/1975/218] , where, after referring to Secretary of State v. Hindustan Co-operative Insurance Society Ltd. case AIR 1931 PC 149 [LQ/PC/1931/46] ; 1931 58 IA 259, apex Court summed up the position thus :"On a consideration of these authorities, therefore, it seems that the following proposition emerges :

Where a subsequent Act incorporates provisions of a previous Act, then the borrowed provisions become an integral and independent part of the subsequent Act and are totally unaffected by any repeal or amendment in the previous Act. This principle, however, will not apply in the following cases :

(a) where the subsequent Act and the previous Act are supplemental to each other;

(b) where the two Acts are in pari materia;

(c) where the amendment in the previous Act, if not imported into the subsequent Act also, would render the subsequent Act wholly unworkable and ineffectual; and

(d) where the amendment of the previous Act, either expressly or by necessary intendment, applies the said provisions to the subsequent Act."

In almost an identical case, it was held by the apex Court with reference to section 3 (charging section) of the U. P. Sales Tax Act, 1948 and section 3A thereof (authorising variation of rate of tax) and section 4 (providing for exemption from tax) that a notification of recall of exemption is not a condition precedent. It was held that after notification under section 4 granting exemption from liability to sales tax in respect of certain class of goods, when a subsequent notification under section 3A prescribes the rate of tax leviable on an item of that class, the intention is to withdraw the exemption and make the same liable to tax at the rate prescribed in the notification. The power both of granting exemption and of varying the rate of tax vests in the State Government, and a notification to recall exemption is not a condition precedent for imposing tax at any prescribed rate by a valid notification under section 3A. It was held that levy of tax at the prescribed rate on the sales of "..... of all kinds" under notification dated December 1, 1974 was justified notwithstanding the earlier notification dated January 25, 1958 under which "cotton fabrics of all kinds" were exempted. The second notification had the effect both of withdrawing the exemption and of providing a higher rate of tax and ratings [See : Commissioner, Sales Tax, U.P. v. Agra Belting Works 1987 66 STC 1 (SC)]. The fact situation is identical here and, therefore, levy as made is perfectly in order. The position that emerges, therefore, is that when the power for both the operation, i.e., withdrawal of exemption and for providing higher rate of tax vests in the State Government and the intention to levy tax is clear, the later notification providing for higher rate of tax is legally permissible and cannot be faulted.If there are two entries, one general and the other specific, the ordinary rule of construction that a general entry must give way to a specific entry is to be followed. The authority is to see that if two entries are apparently in conflict with one another, an attempt must be made to construe them harmoniously and not to treat them repugnant each other. A commodity falling under the general entry as also a specific entry has to be taxed in terms of special entry as the same is to prevail over the general entry. That itself is sufficient to reject the stand of the assessee.

It is submitted that tarpaulin being one of the goods of special importance covered by Central Excise Act and the additional levy of sales tax is unauthorised. Duties of Excise (Goods of Special Importance) Act, 1957 (in short, "the Additional Excise Act").

The residual limb of the question concerns the levy of tax on tarpaulin, it being claimed to be one of the declared goods. Article 286 of the Constitution of India imposed certain restrictions on the legislative powers of the States in the matter of levy of sales tax on sales taking place outside the State, sales in the course of import or export, sales in the course of inter-State trade or commerce and sales of declared goods. The Sales Tax Acts in force in several States were not in conformity with the provisions of the Constitution and attempts to bring those laws to be in conformity with these provisions gave rise to a lot of litigation. This led to an amendment of article 286. Clause (2) of the article, as it stands, since September 11, 1956, authorised Parliament to formulate principles for determining when a sale or purchase of goods can be said to take place in the course of import or export or in the course of inter-State trade or commerce. Clause (3) was amended, to restrict the powers of a State to impose sales or purchase tax on declared goods. The Central Sales Tax Act, 1956 (in short, "the Central Act") which came into force on January 5, 1957, formulated the principles referred to in article 286(2). As already mentioned, this Act was amended, inter alia, by Act 16 of 1957 with effect from June 6, 1957 and by Act 31 of 1958 with effect from October 1, 1958. Section 14 listed the goods which are considered to be of special importance in inter-State trade or commerce. Section 15 of the Act, as originally enacted, was brought into force only with effect from October 1, 1958. It stipulated that levy of sales tax on declared goods should not be at a rate exceeding 2 per cent or be levied at more than one point, in a State. Before this section came into force, it was amended by Act 16 of 1957 which retained the first restriction and, so far as the second is concerned, provided that the tax should be levied only on the last sale or purchase inside the State and even that should not be levied when that last sale or purchase is in the course of inter-State trade or commerce as defined. Act 31 of 1958 amended section 15 to impose certain modified restrictions and conditions with the details of which we are not concerned here. These restrictions clearly entailed loss of revenue to the States and it was considered expedient and desirable to compensate the States for the proportionate loss of sales tax incurred by them. Thus, even before section 15 was brought into force, the Central Government decided to pass an Act to provide for the levy and collection of additional duties of excise on certain goods and for the distribution of a part of the net proceeds thereof among the States in pursuance of the principles of distribution recommended by the Second Finance Commission in its report dated September 30, 1957. This proposal to levy additional duties of excise on certain special goods was a part and parcel of an integrated scheme under which sales tax levied at different rates by the States on certain goods was ultimately substituted by the levy of additional duties of excise on such goods and the States were compensated by payment of a part of the net proceeds of the said additional levy on such goods. That this clearly was the genesis and object of the 1957 Act also appears from its Objects and Reasons. Some of the items liable to excise duty were picked out from the Schedule to the Central Excise Act. They were listed among the declared goods of section 14 of the Central Act and also made liable to additional excise duty under the Additional Excise Act. A perusal of the lists under the three enactments shows that out of the items listed in the Schedule to the Central Excise Act, sugar, tobacco, cotton fabrics, rayon or artificial fabrics and woollen fabrics were categorised as declared goods and subjected to additional excise duty. When the numerical order of these items in the Central Excise Act (originally 8, 9, 12, 12A, 12B) came to be changed in 1960 (as 1, 4, 19, 21, 22) a corresponding change was effected in the Additional Excise Act. The fact that "cotton fabrics" though listed as item No. 12 in the Schedule to the Central Excise Act was not brought into the list in section 14 till October 1, 1958 does not alter the position that these three Acts are inter-connected and that certain goods taken out from the Schedule to the Central Excise Act were to be subjected to the special treatment outlined in the Central Act and the Additional Excise Act.So far as the prescription of rate in the background of sections 14/15 of the Central Act is concerned, it has to be noted that meaning or intention of clause (3) of article 286 is not to destroy by operating sections in the Sales Tax Act of the State which shall justify to modify them in accordance thereof. The law of the State is declared to be subject to restrictions and is contained in the law made by Parliament and rate in the State Act would stand modified. The effect of article 286(3) is brought out by second proviso to section 5(1) of the Central Act, but the proviso has been enacted out of abundant caution and even without it result was the same. The proviso was added with effect from April 1, 1966. But the question whether there was violation of the requirement cannot be adjudicated in a revision under section 41 of the Act.

In essence, the submission of the assessee is that the products in question as occurring either in serial No. 19 of Schedule I of the Central Excise Act or heading 52.06-52.07, as covered by section 14 of the Central Act, as declared goods, the rate of tax has to stand per time to move in terms of section 15. Reliance is placed for this purpose on a decision of the apex Court in Modi Spinning and Weaving Mills Co. Ltd. v. Commissioner of Sales Tax, Punjab 1965 16 STC 310. [LQ/SC/1964/261] It is submitted that rate of tax cannot exceed 4 per cent, and no levy is permissible beyond one stage. It is to be noted that levy is questioned on the ground of having made beyond legislative competence of the State. The said submission has been made with reference to article 286(3) of the Constitution read with section 15 of the Central Act. It is to be noted that such a question was not raised before the Tribunal and there are no pleadings to that effect. Even if it is accepted as a pure question of law involving no factual determination, it cannot be adjudicated in an application under section 41 of the Act.In the result, all the tax revision cases are without any merit and are dismissed.

Petitions dismissed.