# [1976] Supp. 1 S.C.R. 497

- **Citation:** [1976] Supp. 1 S.C.R. 497
- **Court:** Supreme Court of India
- **Decided:** 1976-05-03
- **Case number:** Writ G Petition No. 49 of 1973
- **Bench:** A. N. Ray, M. H. Beg, Jaswant Singh
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1976-supp-1-s-c-r-497-7156
- **Pages:** 8

## Headnote

Raiastlwn Sales Tax Act, 1954-Statutory re1nedies provided under the Act
not exhausted-No error apparent on the face of the record-If petition under
Art. 226 lay .
Co11.stitution of India, 1950-Art. 32-Absence of jurisdiction to assess not
shown-If remedy lies under Art. 32.
B
c
Rayon tyre cord fabric which is a textile consisting of rayon threads in the
warp and cotton threads in the weft is manufactured on weaving looms in the
same manner as any other ordinary textil~. The tyre manufactureni, to whom
the product is supplied, impregnate the fabric with rubber and weave it into
fabric. Under Entry 18 of Schedule of the Rajasthan Sales Tax Act, 1954,
rayon fabric& were exempt from sales tax.
When the Commercial Tax Ollkcr
rejected the petitioners' objections to sales tax being leviro on rayon tyre cerd
fabric, the petitioners filed a petition under Article 32 of the Constitution alleging
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breach Of Fundamental Rights.
Tn respect of certain earlier assessment years, however, the view of the
Commercial Tax Officer was that the gocxls were not the end prOOuct; when, the
matter was taken to the High Court, it held that, until the statntory remedies
had been exhausted, no case for interference under Art. 226 arose. It did
not find any error apparent on the face of the record. Hence, the appeals by
!YlJCCial leave-.
E
In the writ petition as well as in the appeals it was contended that the
goods constituted the end-Product which the petitioners sell in the market and,
therefore, were exempt; fr<>m sales tax.
Di1missing the
pe.ti~tion and appeals,
HELD : (I ){a) It is difficult to find fault with the view of the High,
Court that there was no error apparent on the face of the record and that the
taxing authorities should be left lo determine whether the tyre cord fabric
is more correctly capable of being described as a fabric or as merely cord
passing of as a textile fabric. This is really a technical question.
In any case,
it is: a question on which two vie~ may be. possible.
[503C]
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(b) The fact that the tyre co.rd fabric manufactured by the petitioners i9
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\VOVOll by its purchases into a fabric in the same way as is being done by the
petitioners means that the tyre cord fabric serves also as raw material fOr another
fabric which ultimately emerges by .subjecting the goods to a process of impreg~
nating it whh rubber. The essential question to determine is the stage at which
the J¥)Ods under consideration beco1ne textile fabrics if they do become that at
all. [S02C; 503Al
(2) This Court cannot interfere under Art. 32 with the decisioh of the
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Commercial Tax Officer, because no Fundamental Right is -shown to be affected
by a mere determination of the question.
There was no absence of jurisdiction
of !be taxing authorities who had th! power to decide the question either rightly
, or wrongly, [S03El
,
34-833 Sup Cl/76
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SUPREME COURT REPORTS [1976] SUPPLEMENTARY
ARGUMENTS
For the vetitioners
Respondent No. 1 did not produce or get any evidence fro111 the commercj<tl
community deali.tig with rayon tyre yarn and cord and rayon tyre fabnc for
the purpose of conuoverting the conclusive evidenc..-e produced by the pc•1uo~r"
to the elfect that in the commercial community dea1ing with the said goods the.be
goods were different both fr6m the, point of view of' manufacture and abo
from the point of view of ultimate end·product and are considered to
b~
different by the commercial community, \Vhich treats rayon tyre cord fabric as
fabric.
There was no evidence on the contrary to coine to the conclusion that
the rayon tyre fabric was not fabric. The High Court wrongly relied on 25
STC 407 which had no application in the present case, ignoring the decision :r1
22 SIC 470 and zg STC 431. It was therefore not a case of disputed question
of fact, but a case of admitted fact by the commercial community against which
there was no evidence before the respondent.
The respondent committed an error apparent on the face of the record aIJLl
procee

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497
DELHI CLOTH & GENERAL MILLS CO. LTD. & ORS.
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v .
R.R. GUPTA, COMMERCIAL TAX OFFICER, JAIPUR & ANR.
May 3, 1976
(A. N. RAY, C.J., M. H. BEG AND JASWANT SINGH, JJ.]
Raiastlwn Sales Tax Act, 1954-Statutory re1nedies provided under the Act
not exhausted-No error apparent on the face of the record-If petition under
Art. 226 lay .
Co11.stitution of India, 1950-Art. 32-Absence of jurisdiction to assess not
shown-If remedy lies under Art. 32.
B
c
Rayon tyre cord fabric which is a textile consisting of rayon threads in the
warp and cotton threads in the weft is manufactured on weaving looms in the
same manner as any other ordinary textil~. The tyre manufactureni, to whom
the product is supplied, impregnate the fabric with rubber and weave it into
fabric. Under Entry 18 of Schedule of the Rajasthan Sales Tax Act, 1954,
rayon fabric& were exempt from sales tax.
When the Commercial Tax Ollkcr
rejected the petitioners' objections to sales tax being leviro on rayon tyre cerd
fabric, the petitioners filed a petition under Article 32 of the Constitution alleging
D
breach Of Fundamental Rights.
Tn respect of certain earlier assessment years, however, the view of the
Commercial Tax Officer was that the gocxls were not the end prOOuct; when, the
matter was taken to the High Court, it held that, until the statntory remedies
had been exhausted, no case for interference under Art. 226 arose. It did
not find any error apparent on the face of the record. Hence, the appeals by
!YlJCCial leave-.
E
In the writ petition as well as in the appeals it was contended that the
goods constituted the end-Product which the petitioners sell in the market and,
therefore, were exempt; fr<>m sales tax.
Di1missing the
pe.ti~tion and appeals,
HELD : (I ){a) It is difficult to find fault with the view of the High,
Court that there was no error apparent on the face of the record and that the
taxing authorities should be left lo determine whether the tyre cord fabric
is more correctly capable of being described as a fabric or as merely cord
passing of as a textile fabric. This is really a technical question.
In any case,
it is: a question on which two vie~ may be. possible.
[503C]
F
(b) The fact that the tyre co.rd fabric manufactured by the petitioners i9
G
\VOVOll by its purchases into a fabric in the same way as is being done by the
petitioners means that the tyre cord fabric serves also as raw material fOr another
fabric which ultimately emerges by .subjecting the goods to a process of impreg~
nating it whh rubber. The essential question to determine is the stage at which
the J¥)Ods under consideration beco1ne textile fabrics if they do become that at
all. [S02C; 503Al
(2) This Court cannot interfere under Art. 32 with the decisioh of the
H
Commercial Tax Officer, because no Fundamental Right is -shown to be affected
by a mere determination of the question.
There was no absence of jurisdiction
of !be taxing authorities who had th! power to decide the question either rightly
, or wrongly, [S03El
,
34-833 Sup Cl/76
A
B
c
D
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SUPREME COURT REPORTS [1976] SUPPLEMENTARY
ARGUMENTS
For the vetitioners
Respondent No. 1 did not produce or get any evidence fro111 the commercj<tl
community deali.tig with rayon tyre yarn and cord and rayon tyre fabnc for
the purpose of conuoverting the conclusive evidenc..-e produced by the pc•1uo~r"
to the elfect that in the commercial community dea1ing with the said goods the.be
goods were different both fr6m the, point of view of' manufacture and abo
from the point of view of ultimate end·product and are considered to
b~
different by the commercial community, \Vhich treats rayon tyre cord fabric as
fabric.
There was no evidence on the contrary to coine to the conclusion that
the rayon tyre fabric was not fabric. The High Court wrongly relied on 25
STC 407 which had no application in the present case, ignoring the decision :r1
22 SIC 470 and zg STC 431. It was therefore not a case of disputed question
of fact, but a case of admitted fact by the commercial community against which
there was no evidence before the respondent.
The respondent committed an error apparent on the face of the record aIJLl
proceeded on irrelevant and extraneous considerations.
In any event the tyre
cord fabric is sold by the petitioners as an end-product to cus1omers. To what
use the customers put such commodity is no concern of the appellan'.
Su~h
error can be corrected by way of writ petition under arts. 226 and 227 of the
Constitution.
'The alternative remedy of appeal is not at all efficacious in the facts and
circumstances of the present case inasmuch as the Commissioner and the State
Government having already made up their mind to le\ry tax, no relief could be
expected by the appellants from him and the High Court should have interfered
under arts. 226 and 227.
Further in this case there was no question of disputed
fact;.
'The sample was admitted.
There was uncontradicted evidence that the
product of the petitioners is known as rayon cord fabric by the commercial
community and by common parlance. The case isi a misdirection of law on
the part of the assessing authority.
For the respondent~
There was no error of Ia.w apparent on the, face of the record as. contend~d
by the petitioners.
The High Court rightly rejected the writ petitions on the
ground that there were disputed facts ahd there are alternative remedies and
full and adequate machinery under the Act itself.
The assessee mills, when paying excise duty, _paid it only as on yarn under
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entry 18 of the First Schedule to the Central Excise and Salt Act. The mills
did not pay additional duty under the Additional Duties of Exc:se (GOOds of
Special Importance) Act 1956 on the ground that the material was not fabric.
V/hen it suited the mills the material was said to be yarn and in case of sales
tax it contended that it was fabric.
This fact itself was a strong indication
that this was a disputed question of fact.
ORIGINAL JURISDICTION/CML
APPELLATE
JURISDICTION : Writ
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Petition No. 49 of 1973.
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Under Article 32 of the Constitution and
Civil Appeals Nos. 43 arid 44 of 1973
Appeals by Special Leave from the Judgment and order dated
the 27th October 1972 of the Rajasthan High Court in D. B. Civil
Writ Petittion Nos. 398/72 and 1885/71 respectively.
A. K Sen, B. Sen and H. K. Puri for the Appellants .
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S. T. Desai, S. M. lain and S. K. lain for the Respondents.
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D. C. M. V. c. T. O. (Beg, J.)
499
The Judgment of the Court was delivered by
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BEG. J.-We have before us a petition under Article 32 of the
Constitution and two appeals by Special leave from the judgment
of the High Court of Rajasthan between the same parties.
The three
cases before us raise the same question of law.
It is: Do the goods
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called "Rayon tyre Cord Fabric" sold by the Delhi Cloth & General
Mills Co. Ltd. to manufacturers of tyres, who use it for the purpose
of impregnating it with rubber, fall under entry 18 of the Schedule
of the Rajastban Salee Tax Act, 1954 (hereinafter referred to
as
'the Act')'?
The schedule mentioned above gives a list of goods on the sale·
or purchase of which no tax is payable under the Act.
"The rele·
vant entry 18, which was omitted in 1973, reads as follows :
"18. All cotton fabrics, rayon or artificial silk fabrics,
woollen fabrics, sugar and tobacco, as defined in the Additional Duties of Excise (Goods of Special
Importance)
Act, 1957 (Central Act 58 of 1957)".
Section 2(C) of the Additional Duties of Excise (Goods of Special
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Importance). Act, 1957, lays down:
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"2 ( C) the words and expressions
'sugar',
'tobacco',
'cotton fabrics', 'silk fabrics', 'woollen fabrics' and rayon
or artificial silk fabrics' shall have the meanings respectively
assigned to them in Items Nos. 1, 4, 19, 20, 21 and 22 of
the First Schedule to the Central Excise and Salt Act, 1944".
The Writ Petition of the Delhi Cloth and General Mills Co. Ltd.
states that "rayon tyre cord fabric" is "manufactured out of rayon
yarn and cord".
It goes .on to explain that this fabric is "a textile
consisting of rayon threads in the warp and cotton threads in the
weft and is manufactured on weaving looms in the same manner as
in other ordinary textile".
It is also stated there :
"The fabric consists of more than 60% by weight of
rayon and is unprocessed. The weft threads are not used
merely for tying the warp threads together !or the purpose
of convenient transport or storage but form an integral part
of the whole fabric".
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SUPREME COURl
REPORIS I 197Cl[
SL'l'PIE~!FNl,\l(Y
The petitioners
state that the manufacturers of tyros to whom
the fabric is supplied "impregnate the fabric with rubber and weave
it into a fabric in the same way as is being done by the first petitioner".
Thus, the petitioners allege that they manufacture "a textile" and also that it serves as part of raw material for what ultimately also goes into the manufacture of a fabric.
After indicaling the manner in which and the substance out o[
which "rayon tyre cord fabric" is made and its composition,
the
petition sets out ilcm 22 of the first schedule of the Central Excises
and Salt Act, 1944, as the applicable entry covering the goods manufactured by the petitioner.
This item reads as follows :
"Rayon or artificial silk fabrics 'means all varieties of
fabrics manufactured either wholly or partly from rJyon
or artificial silk and includes embroidery in the piece, in
strips or in the motifs and fabrics impregnated or derivatives or of other artificial plastic materials, but docs not include any such fabrics :--
(i) If it contains 40% or more by weight of wo<1l.
(ii) If it contains 40% or more by weight of silk.
(iii) If it contains cotton and less than 60% by weight
of rayon or artificial silk; or
(iv) If it contains no cotton and less than 40% by weight
of wool and less than 40% by weight of rayon or
artificial silk".
The petitioners assert that, from years 1966 to 1969,
the respondent Commercial Tax Officer was not subjecting the goods of
this description to sales mx and accepted the case of the petitioners
that they were exempt from taxation.
The reasoning of the Commercial Tax
Officer, in
exempting these
goods,
is
also
mentioned.
It is then stated that,
as
some
questions
were
put
itt the Rajasthan State Legislative Assembly, on or about 20th April,
1971, asking for the reason why this particular type of goods of the
petitioners were exempted from Sales tax, the Commissioner of Commercial Tax issued a letter to the Commercial Tax Officer to levy
Sales tax on the "rayon cord fabric" manufactured by the petitioner.
Thereafter, notices under the proviso to S. 12(1) of the Act were
issued for the years 1965 to 1969 with a view to reopening the assessments on the ground that the sales of_ these goods had ':"r?ngly
escaped assessment, but these were dropped due to some preltmmary
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D. C. M. v. C.T.O. (Beg, J.)
501
-Objections.
Fresh notices were then issued and proccet!iugs
for
subsequent assessment years were also taken.
By orders passed on
various dates, the Commercial Tax Officer rejected the petitioners'
objections to Sales tax on "rayon tyre cord
fabric".
The
petitioners have, however, come up to this Court directly against the
order and provisional assessment dated 21st November, 1972. It
also appears from the writ petition that proceedings for the assessment year 1972-73 are still pending before the Commercial
Tax
Officer.
Civil Appeals Nos. 43 of 1973 and 44 of 1973 by special
leave are directed against a common judgment of a Division Bench
of the High Court of Rajasthan, given on 27.10.1972, dismissing the
appellants' Writ Petitions against the assessment order dated 26th
March, 1971, for the years 1968-69 and 1969-70 made
by
the
Commercial Tax Officer.
The view of the Commercial Tax Officer, questioned by U1e petitioners, was that the goods now sought to be taxed are not the "end
product".
The Hi~h Court did not go into the merits cf the case.
It accepted the preliminary objection of the State of Rajasthan that
the petitioner should first resort to alternative remedies providc<l under the Act so that the appellate authority under Section 13 of the
Act may go into the whole ev'dence and decide disouted questions
of fact.
TI1ere is also provision for revision by the Board of Revenue
under Section 14 when moved by the assessing authority. Tue High
Court did not find any error "apparent upon the face of the record"
The taxing authorities have the jurisdiction to decide the question
before them either rightly or wrongly. In any case, its view was that,
until thB statuto1y remedies had not been exhausted, leaving some
"error apparent on the face of the record" still to be rectified by the
High Court, a case for interference under Article 226 of the Constitution will not arise.
It is urged on behalf of the Delhi Cloth Mills that no disputed
question of fact arises.
It is submitted that, on admitted facts,
it
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could be decided whether the "tyre cord fabric" is an exempted "fabric"
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or not. We think tliat this view over-looks several matters, indicated
below, including the admission on he ha If of the Delhi Cloth
Mills
that, in the case before us, the "tyre cord fabric" manufactured by it
is woven by its purchasers "into a fabric in the same way as is being
done by the first petitioner". This certainly means that the tyre cord
fabric serves as raw material for another fabric which ulumately . H
emerges by subjecting the goods manufactured by Delhi Cloth Mills
to a process of impregnating with rubber.
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SUPREME COURT REPORTS [1976] SUPPLEMENTARY
A sampk of the tyre cord fabric was actually produced before
us. It is said that the "fabric" is manufactured in the same way ac
doth is woven on looms.
It consists of cords which could be said
to constitute warps, running length-wise, and wefts, running brcadthwise.
But, the spaces left between them are so wide,
presumably
for purposes of impregnation with rubber, that it may not pass for
an ordinary "fabric" like one of those mentioned in entry l 9 of the
first scl1cJulc to ~he Central Excises and Salt Act,
1944, such as
''tussors", "corduroy", "gaberdine", "deniin'',
Indeed, if the
"tyre
cord fabric" is so well established a category of rayon "fabric'', it could
. have found mention specifically in item 22 in the same way as the
numerous varieties of cotton fabrics are mentioned in item 19. In answer to this argument, it could be urged that, for some reason, entry
No. 22 does not enumerate rayon and silk fabrics in the same fashion
as the cotton fabrics are specified by name in item 19.
It is certainly a question which appertains to the knowledge of
teclmical aspects of textile weaving and production to determine at
what stage threads or cords forming warps and wefts really amount
to a "fabric". It is true that the term fabric has a wide meaning. Its
first meaning given in the Oxford English Dictionary is : "A product
of skilled workmanship".
The first example of such a product is :
"An edifice, a buildina". The fourth example of the first meanino is:
"a manufactured material; now only a 'textile fabric', a woven stuff".
We think that we are necessarily concerned here only with "textiles" as fabrics.
This is clear from entries 19 to 22(0) of the first
Schedule of the Central Excises and Salt Act, 1944. Entry 22AA
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is "textile fabrics not elsewhere specified".
This residuary entry and
the descriptions in preceding entries seem to us to make it abundantly
clear that we are dealing here only with "textile fabrics".
The case
of the Delhi Clo!l1 Mills also is that the product is a "textile". Therefore, the essential question to determine is the stage at which the goods
under consideration become a 'textile fabric".
The meaning of the
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term "textile'', given in the Oxford Dictionary, is : "A woven fabric;
any kind of cloth". It must acquire a body and a texture.
Pr.esumably it is not just the skeleton of a textile.
Apparently, it is more
than that. But, against pushing this point of view too far it may be
urged that in the technical and commercial parlance we are dealirig
\vi th a "fabric".
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It is, therefore, difficult to find fault with the view of the High
Court that there is no error apparent on the faee of the record and
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D. c. M. v. c.T.O. (Beg, J.)
that the taxing authorities should be left to determine whether
the
"tyre cord fabric" is more correctly capable of being described as
a
fabric or as merely cord pretending to pass off as a textile fabric.
This is really a te~hnical question. In any case, it is a question on
which two views seem possible on apparent facts.
And, neither of
the two views can be rejected outright as untenable. It requires careful consideration of the ·technical processes of manufacturing, of the
composition of the "tyre cord fabric", and an evaluation of opinions
of experts on tile subject, to be able to decide the question satisfactorily. It may also require some examination of commercial usage
and terminology or the language of the market in goods of this type.
We, therefore, think that the High Court was right fo not interfering
with the decisions of tl1e taxing authorities at this stage.
We also think that for the same reason we could not interfere under Article 32 with the decision of the Commercial Tax Officer. Indeed,
no fundamental right is shown to be affected by a mere determination
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of the question indicated above.
There is no absence of jurisdiction
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of the taxing authorities who had the power to decide the question
either rightly or wrongly.
It has been ur!!:ed, on behalf of the Deihl Cloth Mills that the
High Court should have interfered as the question whether the !)Te
cord fabr;c is the end product or not in the final manufacture of another fabric was q:iite irrelevant. It was submitted that, 'o far as
the Delhi Cloth Mills is concerned, the goods under con~ideration
constitute the "end product" which they sell in the market. The
example given was that of cloth which is the "end product" for the
mills which manufacture cloth, but, it becomes the raw material for
tailors and for those who make ready-made clothes to sell them. This
argument overlooks that it is not so much the point of manufacture
at which the Mills sell their own product which determines the nature
of goods which are entitled to exemption, but it is the stage reached
by this product, in the process of manufacture of fabrication of a
"textile", which should decide the question. As we have already in'
dicated, the context in which the entry occurs show5 that it is meant
for "texfle" fabrics and nn• for any kind of fabric. Therefore. even
if the tyre cord fabric may be the end product for the Delhi Clotl1
Mills, the crucial question is : Does this product constitute a fabric
which is a textile?
A textile fabric does not cover everything which
could be made into a fabric.
Mere cord does not become a
textile
fabric
just because it requires some skill to make it.
The rather wide dictionary meanings of the term
"fabric'' do not
appear to us to give the exact meaning of the term "fabric" as
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SUPREME COURT REPORTS [1976] SUPPLEMENTARY
used in the relevant entries entitled to exemption.
In tho entries, it
evidently means a fabric which is also a textile.
The question, therefore, to be determined by the Tax authorities themselves is whether
the product for which the Delhi Cloth Mill claims exemption is a textile fabric and not any other kind of fabric.
Having indicated the nature of the enquiry which must be undertaken by the taxing authorities, we find that there is no suflicient reason
for overriding and discarding the High Court's view that, on what appeared to the High Court to be a question of fact, it should not decide
whether the product under consideration constitutes a fabric entitled
to exemption.
There was no appeal by the State of Rajasthan. It does
not,
therefore, seem proper for us to finally decide, on merits, the question
argued before us in the appeals by the Delhi Cloth Mills which are
before us unless we could have decided the matter in favour of the
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appellant.
We could have only done that if we were of opinion that
the taxing authorities had committed error apparent on the face of
the record.
But, as already indicated above, we are not of this opinion.
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For all the reasons given above, we think that the Writ Petition
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as well as the appeals by special leave are liable to be dismissed, and,
we hereby dismiss them with one set of costs.
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P. B. R.
.4 ppe(I/ dismissed.
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