JUDGMENT

S. RANGANATHAN, J.:— A very interesting question as to the principles of interpretation of legislation by incorporation or reference arises for consideration in these appeals arising out of certain assessments to sales tax in Kerala. Section 9 of the Kerala General Sales Tax Act 1963 which came into force on 1-4-1963 granted exemption from sales tax on goods specified in the third Schedule to the said Act. These included the following :

5. Sugar as defined in item of the First Schedule to the Central Excises and Salt Act, 1944;

6. Tobacco as defined in item 4 of the First Schedule to the Central Excises and Salt Act, 1944 and

7. Cotton fabrics, silk fabrics, woollen fabrics and rayon or artificial silk fabrics as defined in item Nos. 19, 20, 21 and 22 respectively of the First Schedule to the Central Excises and Salt Act, 1944.

The question before us is whether, in respect of the assessment years 1971-72 and 1972-73, with which we are concerned, the exemption given to cotton fabrics under item 7 above should be restricted to cotton fabrics as defined in the Central Excises & Salt Act, 1944 (the 1944 Act) as it stood on 1-4-1963 or whether it would also cover goods falling under the said definition after its amendment in 1969.

2. Though we are concerned only with the interpretation of the Kerala General Sales Tax Act, 1963, it is necessary to refer back to the earlier history of some Central as well as State legislations :

(i) We start with the 1944 Act. By this Act, excise duty was levied on the manufacture or production of various types of goods enumerated in the First Schedule to the Act. Item 19 (originally item 12) of the First Schedule, as it stood on 1-4-1963, defined cotton fabrics thus :

"Cotton fabrics-

Cotton Fabrics mean all varieties of fabrics manufactured either wholly or partly from cotton and include dhoties, sarees, chaddars, bed sheets, bed-spreads, counter-panes and table cloths, but do not include any such fabric x x x x x

Item 19 was amended by the Finance Act, 1969. After amendment, it reads thus:

"19. Cotton Fabrics

Cotton fabrics means all varieties of fabrics manufactured either wholly or partly from cotton and includes dhoties, sarees, chaddars, bed sheets, bed spreads, counter panes, 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 x x x x x x"

(Underlining ours)

The question set out earlier assumes importance because the respondents assessees deal in "P.V.C. Cloth", an item of goods which is clearly covered by the amended definition but, perhaps, not by the original one.

(ii) In 1957, there were certain legislations of Parliament affecting the levy of sales tax and excise duty. The first of these was the Central Sales Tax Act, 1956 (C.S.T. Act) passed in pursuance of Article 286 (3) of the Constitution of India which reads thus :

"Any law of a State shall, in so far as it imposes or authorises the imposition of, a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-state trade or commerce, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify."

The C.S.T. Act received the assent of the President on 24-12-56. S. 14 of the Act declared certain goods to be goods of special importance in inter-state trade or commerce. (hereinafter referred to as declared goods.) These included, as on 1-4-1963, the following:

"(ii-a) cotton fabrics, as defined in Item No. 19, of the first Schedule to the Central Excises and Salt Act, 1944;

xx xx xx xx xx

(vii) rayon or artificial silk fabrics, as defined in Item No. 22 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944),

(viii) sugar, as defined in Item No. 1 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944)

(ix) tobacco, as defined in I