9911796707
TMI Blog1966 (11) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... The notification that was superseded by the impugned notification was in the following terms: "EXCISE AND TAXATION DEPARTMENT NOTIFICATION Jaipur, January 31, 1958. No. F. 5(3) E. T./58.-In exercise of the powers conferred by sub-section (2) of section 4 of the Rajasthan Sales Tax Act, 1954 (Rajasthan Act, 29 of 1954), the State Government, being of the opinion that it is necessary in the public interest so to do, does hereby exempt the sale of any garments whether prepared within or imported from outside Rajasthan the value of which does not exceed Rs. 4 in single piece, from payment of any tax under the said Act. By Order of the Governor, (Sd.) G.S. PUROHIT, Secretary to the Government." The petitioners sell "banians" and "chaddies". They claimed that "banians" and "chaddies" were garments within the meaning of this notification, and, therefore, they were exempt from the sales tax when the value of a single piece did not exceed Rs. 4. The department, however, did not accept the contention. One of the dealers in these goods, M/s. Pareek Hosiery Products filed a writ petition in this Court which was D.B. Civil Writ Petition No. 376 of 1960. It was decided by this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s". They urge that the first notification still stands good and according to the judgment of this Court the petitioners are entitled to an exemption from sales tax in respect of the sale of "banians" and "chaddies" which have already been held to be garments within the meaning of the first notification. In attacking the validity of the second notification learned counsel for the petitioners have advanced a three pronged argument. It is urged that: (1) the notification was violative of Article 14 of the Constitution. It is further argued that there was no rational basis of classification between garments as such and knitted garments like "banians" and "chaddies". No reason was shown as to why particular kinds of garments were exempted from tax and why others were placed outside the category of exempted garments; (2) the term hosiery did not include "banians" and "chaddies", and (3) the notification was in excess of the powers of the State Government under section 4(2) of the Act. It is argued that by partially withdrawing the exemption granted under the previous notification the State Government was seeking to tax certain kinds of garments which it was entitled to do. It is conseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trees only from an area of 450 acres in 5 years at the rate of 90 acres a year. The income that the petitioner was receiving was Rs. 3,100 per year, but the impugned Act imposed a burden of Rs. 50,000 per year. It was in this context that their Lordships held that inequality was writ large on the Act and was inherent in the very provisions of the taxing section. However, their Lordships laid down the following principles regarding the powers of the Legislature to classify persons or properties into different categories and to subject them to different rates of taxation with reference to income or property. Their Lordships observed as follows: "A taxing statute is not wholly immune from attack on the ground that it infringes the equality clause in Article 14, though the Courts are not concerned with the policy underlying a taxing statute or whether a particular tax could not have been imposed in a different way or in a way that the Court might think more just and equitable. If the Legislature has classified persons or properties into different categories which are subjected to different rates of taxation with reference to income or property, such a classification would not be open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is all the heavier when the legislation under attack is a taxing statute. The case of Kunnathat Thathunni Moopil Nair v. State of Kerala and AnotherA.I.R. 1961 S.C. 552. was relied on in this case. Their Lordships also reviewed a number of American decisions and also extensively quoted from standard books on Constitutional Law, such as, Rottschaefer's Constitutional Law and Willis' Constitutional Law. Their Lordships referred with approval to an important passage from Madden v. Kentucky[1940] 309 U.S. 83.: "In taxation even more than in other fields Legislatures possess the greatest freedom in classification. The burden is on the one attacking the legislative arrangement to negative every conceivable basis which might support it." It will be thus seen that it is the duty of the petitioners to negative all conceivable bases which might be urged in support of the notification before they can be successful in showing that the same was discriminatory. In Khandige Sham Bhat v. Agricultural Income-tax Officer, Kasaragod and Another[1963] 48 I.T.R. (S.C.) 21; A.I.R. 1963 S.C. 591., their Lordships observed as follows: "It is true, taxation law cannot claim immunity from the equality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the State Government was clearly of opinion that it was necessary in public interest to exempt sale of garments from sales tax, but in doing so it has imposed certain conditions which it was entitled to put in terms of section 4(2) of the Act. Condition No. 1 was that the value of such article should not exceed Rs. 4 in single piece and the other condition was to exclude hosiery products and hats of all kinds. The expression "all kinds" occurring in the words of "excluding hosiery products and hats of all kinds" shows that if any garment is also a hosiery product of any kind, then it is not within the category of exempted garments. The classification adopted in the notification is "garments in general" and "hosiery products including garments which are hosiery products". The State Government could have very well thought that hosiery products are used by people who are comparatively better off than those who do not use them or it may be that the distinction was based on the process of manufacture. Hosiery products are knitted articles. This will be clear when we refer to some standard dictionaries in the course of the discussion that follows. We do not find any warrant for holdin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articles of apparel, and hence to the whole class of goods in which a hosier deals." According to the Webster's Third New International Dictionary the word "hosiery" means knitwear (vide page 1093 of Vol. 1). In Encyclopaedia Britannica the history of the word "hosiery " has been traced at length and it is pointed out that "hosiery" is covering for the feet and legs designed to be worn inside the shoes and other outer foot coverings. Then it is pointed out that the term is so understood in most countries particularly United States of America, but in Great Britain it is taken to include machineknitted garments of all types (vide page 740, Vol. II). In India for historical reasons it is the meaning current in England that has to be taken to be the correct meaning of the term "hosiery". Further the use of the words "of all kinds" in the expression "excluding hosiery products and hats of all kinds" makes it abundantly clear that the intention was to cover wider range of hosiery products than socks or stockings. We are, therefore, satisfied that "banians" and "chaddies", which have knitted fabrics, are hosiery products within the meaning of the impugned notification. We may observe t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
