1962 (2) TMI 68 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the petitioner is liable to pay sales tax on certain hosiery goods manufactured and sold.
2. Whether the petitioner had an alternative remedy through appeal under the Sales Tax Act.
3. Interpretation of the term "garment" under the Rajasthan Sales Tax Act, 1954.

Analysis:
1. The petitioner, engaged in manufacturing hosiery goods, sought relief from sales tax on items priced below Rs. 4 each. The State Government had exempted garments under Rs. 4 from sales tax. The Assistant Sales Tax Officer rejected the petitioner's claim, leading to a demand for tax payment. The petitioner appealed, but the Deputy Commissioner required tax deposit for appeal consideration. The High Court considered the petitioner's plea for exemption, ultimately ruling in favor of the petitioner due to the broad interpretation of the term "garment" and directed a refund of taxes paid on qualifying items.

2. The respondents argued that the petitioner had an alternative remedy through appeal under the Sales Tax Act, emphasizing the need for tax deposit before appeal consideration. The petitioner contended that pursuing an appeal was onerous, especially as a similar case had an unfavorable judgment. Citing legal precedents, the High Court acknowledged the availability of alternative remedies but noted exceptions where immediate relief through a writ was warranted. In this case, considering the circumstances and prior judgments, the High Court rejected the preliminary objection and allowed the petition to proceed under Article 226 of the Constitution.

3. The crucial issue revolved around the interpretation of the term "garment" under the Rajasthan Sales Tax Act, 1954. The Deputy Government Advocate argued that "garment" referred only to outer coverings, excluding items like undergarments. However, the High Court disagreed, emphasizing the broader definition of "garment" as any article of clothing covering the human body. The Court highlighted that the notification did not specify such qualifications, indicating a wide scope for exemption based on price alone. Rejecting the distinction made by the Deputy Commissioner Sales Tax (Appeals) between garments and hosiery goods, the High Court allowed the writ petition, quashed the tax order, and directed a refund based on the interpretation of "garment" provided in the judgment.