Full Judgment Text
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PETITIONER:
JAIPUR HOSIERY MILLS (P) LTD., JAIPUR
Vs.
RESPONDENT:
THE STATE OF RAJASTHAN & OTHERS.
DATE OF JUDGMENT:
27/04/1970
BENCH:
GROVER, A.N.
BENCH:
GROVER, A.N.
SHAH, J.C.
HEGDE, K.S.
CITATION:
1971 AIR 1330 1971 SCR 396
CITATOR INFO :
R 1976 SC 670 (24)
RF 1986 SC1085 (14)
R 1990 SC1637 (21)
ACT:
Constitution of India, 1950, Art. 14-Rajasthan Sales Tax Act
1950 s. 4(2)-Exemption granted by notification to some
garments-Not extended to hosiery, articles-If violates Art.
14.
HEADNOTE:
On January 31, 1958, a notification was issued by the State
Government under s. 4(2) of the Rajasthan Sales Tax Act,
1950, exempting from tax the sale of any garment the value
of which did not exceed Rs. 4. In a writ petition filed by a
manufacturer of vests and underwears, (hosiery articles the
High Court held that the notification covered hosiery
articles also. On March 26, 1962, the State Government
issued another notification under s. 4(2) of the Act
exempting from tax the sale of any garment the value of
which did not exceed Rs. 4 but the exemption was not made
,applicable to ’hosiery products and hats of all kinds’.
The appellants who were doing business in vests and
underwears of knitted fabric challenged in writ petitions
the notifications on the ground that it violated Art. 14 of
the Constitution. The High Court dismissed the petitions
and held vests and underwears came under ’hosiery product’.
In appeal to this Court,
HELD : (1) A taxing status can be challenged on the ground
of infringement of Art. 14, but since the Legislature
possesses a large freedom of classification in matters of
taxation, it can exercise wide discretion in selecting
persons or objects which will be taxed, and, a statute is
not open to attack on the there ground that it taxes some
persons or objects and not others. It must be shown that
within the range of its selection the law operates
unequally. Therefore, it is not for the Court to decide
whether the policy of exempting articles made from woven
cloth was justified or that hosiery articles should also be
given the same exemption. [397 G-H; 398 A]
(2) The High Court ought not to have gone into the matter
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whether vests and underwears are hosiery products as it was
for the assessing authorities to decide, in each case,
whether the taxed goods were hosiery products.[1398 F-G]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 77 to 84
of 1967.
Appeals from the judgment and order, dated November 22, 1966
of the Rajasthan High Court in li. B. Civil Writs Nos. 81
and 590 of 1965 and 9, 201, 217, 511, 512 and 513 of 1966.
H. R..Gokhale, Bishamber Lal and N. K. Puri, for the
appellants.
A.K. Sen and K. B. Mehta, for the respondents.
The Judgment of the Court was delivered by
Grover. J These eight appeals by certificate arise out of a
common judgment of the Rajasthan High Court dismissing the
397
petitions under Art. 226 of the Constitution filed by the
appellants.
The appellants carry on the business, interalia, of manufac-
ture and sale of vests and underwears (Baniyans and
Chaddies) out of knitted fabric. A On January 31, 1958 a.
notification was issued by the State Government under s.
4(2) of the Rajasthan Sales Tax Act 1950, hereinafter called
the "Act", exempting from tax the sale of any garment
whether prepared within or imported from outside Rajasthan
the value. of which did not exceed Rs. 4/- in single piece.
In spite of the. aforesaid notification the authorities did
not exempt from payment of sales tax the sale of vests and
underwears the value of which did not exceed Rs. 4/- in
single piece. The notification was interpreted to mean that
the goods manufactured by the appellants were not garments
within its meaning. M/s Pareek Hosiery Products, Jaipur,
took the matter to the High Court by way of a writ petition
under Art. 226 of the Constitution which was allowed and it
was held that the vests and underwears were covered by the
said notification, On March 26, 1962 the State of Rajasthan
issued another notification in exercise of the powers under
s. 4(2) of the Act by which the sale of garments whether
prepared within or imported, from outside Rajasthan the
value of which did not exceed Rs. 41- in a single piece were
exempted from payment of sales tax but this exemption
excluded "hosiery products and hats of all kinds." The
appellants were subjected to sales tax in respect of sales
of vests and underwears of knitted fabric for the periods of
assessment ranging between April 1, 1961 to October 31,
1965. Penalties were also levied on them. It was in these
circumstances that the appellants filed writ petitions in
the High Court.
The principal attack on the impugned notification was based
on Art. 14 of the Constitution. It was urged before the
High Court as it has been contended before us that there was
no rational basis’ for classification between garments as
such and knitted garments like Baniyans and Chaddies. In
the affidavit which was filed by the State no reason was
given why particular kind of garments were exempted whereas
others of the same value were not given the benefit of
exemption., It is well settled that although a taxing
statute can be challenged on ,Idle ,,-round of infringement
of Art. 14 but in deciding whether the law challenged its
discriminatory it has to be borne in mind that in matters of
taxation the legislature possesses the large freedom in the
matter of classification. Thus wide discretion can be
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exercised in selecting persons or objects which will be
taxed and the statute is not open to attack on the mere
ground that it taxes some persons or objects and not others.
It is only when within the range of its
398
selection the law operates unequally and cannot be justified
on the basis of a valid classification that there would be a
violation ,of Art. 14.
Section 4(2) of the Act provides that no tax shall be
payable ,on the sale or purchase of any of the exempted
goods if the ,conditions specified in column 3 of the
schedule are satisfied. Where the State Government is of
opinion that it is necessary or ,expedient in the public
interest so to do, it may by notification ,exempt from tax
the sale or purchase of any goods or class of ,goods or any
person or class of persons on such conditions as may be
specified. The impugned notification was issued in
accordance with this section. It is for the State to decide
which granting the exemption by means of a notification as
to the class of goods which should be exempted in public
interest. As rightly pointed out by the High Court the
notification makes a classification between garments in
general the value of which does not ,exceed Rs. 4/- in a
single piece and hosiery products including hosiery
garments. Hosiery products generally are knitted articles.
They are different from woven articles. It is not for the
court to ,decide whether the policy of exempting articles
made from woven cloth was justified or that hosiery
articles should have been given the exemption in the same
way as other garments. It is entirely ’for the taxing
authorities to take a decision as to the goods which Will be
subjected to taxation and those which would be exempted from
it. As no other discriminatory treatment has been suggested
,on behalf of the appellants we must hold in concurrence
with the view of the High Court that the impugned
notification is not hit by Art. 14 of the Constitution;
It has been pointed out that the High Court proceeded to
,decide whether the Baniyans and Chaddies were included in
the ’term "hosiery products’. Such a decision should not
have been given by the High Court but should have been left
to the assessing authorities dealing with each individual
case. In our judgment the High Court ought not to have gone
into that matter as it was for the assessing authorities to
decide in each case whether the goods which had been
subjected to tax were hosiery products, With these
observations the appeals are dismissed but in the
circumstances there will be no order as to costs.
V.P.S. Appeals dismissed.
399