Bleaching and dyeing on job work is not manufacture, Supreme Court holds on textile cess

27 October 2026

The Supreme Court has held that bleaching, dyeing and processing of handloom and powerloom fabrics by a job worker is not the 'manufacture' of textiles, so no textile cess is payable on it under Section 5A of the Textiles Committee Act, 1963. The case was The Assessing Officer, Textiles Committee v. M/s. Premium Suiting Pvt. Ltd. A Bench of Justice S.V.N. Bhatti and Justice N.V. Anjaria dismissed the Revenue's appeal, with Justice Anjaria writing the judgment. The Textiles Committee had issued a show-cause notice in 2001 demanding Rs 2,68,293 as textile cess from the company, which processes 100 per cent man-made fabrics on a job-work basis. The Textiles Committee Cess Appellate Tribunal upheld the demand, but the Allahabad High Court quashed it. The Court held that 'manufacture' is not defined in the Textiles Committee Act, that the definition in Section 2(f) of the Central Excise Act, 1944 cannot be borrowed for it, and that the word must therefore be read in its common parlance meaning. Relying on Union of India v. R.C. Jain, it said a definition in one Act cannot be imported into another Act that does not define the term. The company made no new textile; it only processed fabric already made by handloom and powerloom units, acting as an extended arm of those manufacturers.