COMMISSIONER OF SALES TAX Vs. MAHAJAN BROS

JUDGEMENT

(1.) IN this reference under Section 44 (1) of the Madhya Pradesh General Sales Tax Act, 1958, (hereinafter referred to as the Act) at the instance of the Commissioner of Sales Tax, the question which we have been asked to answer is:

(2.) THE facts are that M/s. Mahajan Brothers of Indore are dealers in hosiery. In the assessment of sales tax for the period from 1st April, 1959, to 31st March, 1960 they were assessed to sales tax on hosiery sold by them at the rate of four per cent. , according to entry No. 1 of Part VI of Schedule II to the Act. The assessee contended that hosiery goods were liable to tax at the rate of one per cent. , under entry No. 2 of Part IV of Schedule II as they were "ready-made garments". This contention was overruled by the Assistant Sales Tax Officer as well as by the Appellate Assistant Commissioner of Sales Tax in the appeal, which the assessee had preferred against the assessment order. The assessee then preferred an appeal before the Board of Revenue. The Board took the view that hosiery goods were "ready-made garments" and as such the tax payable on them was at the rate of one per cent. , under entry No. 2 of Part IV of Schedule II. The reasoning of the Board was that "garments" meant "clothes" and "clothes" meant "wearing apparel"; that "hosiery goods" were also "wearing apparel"; and that as they were made in "standard shapes and sizes" they were "ready-made garments". On this view, the assessee's appeal was allowed by the Board of Revenue and the case was remitted to the assessing authority for reassessment of hosiery goods taking them as goods falling under entry No. 2 of Part IV of the Schedule.

(3.) THE question raised is as to whether "hosiery goods" fall within the expression "ready-made garments" as used in entry No. 2 of Part IV of the Schedule, which is as follows:ready-made garments, excluding garments of pure silk cloth. Entry No. 1 of Part VI of the Schedule, which the Assistant Sales Tax Officer and the Appellate Assistant Commissioner held to be applicable in the case, runs as under: all other goods not included in Schedule I or any other part of this Schedule. "hosiery goods" have not been specified either in Schedule I or Schedule II to the Act and it is not disputed that if they are not "readymade garments" for the purposes of entry No. 2 of Part IV, then the sales tax payable on them would be according to entry No. 1 of Part VI of the Schedule.