RAM HOSIERY WORKS Vs. STATE OF BIHAR

JUDGEMENT

(1.) On being asked to state a case, the Commercial Taxes Tribunal, Bihar, Patna, has done it under Section 33(3) of the Bihar Saks Tax Act, 1959 (hereinafter called the Act), and referred the following question of law for determination by this Court: Whether, on the facts and circumstances of the case, the hosiery banyans were exempt from the levy of sales tax under item 23 of Schedule III of Notification No. STGL-AR-107/59--9134-F. T. dated 1st July, 1959, as amended from time to time by the Governmen t of Bihar, under Section 4 of the Bihar Sales Tax Act, 1959 ?

(2.) The assessee is a dealer, which manufactures hosiery goods (ganji) from hosiery cloth and sells hosiery goods. It also deals in hosiery cloth. The assessing officer exempted the sale of hosiery cloth to the tune of Rs. 11,672.92 from the imposition of sales tax, as sale of hosiery cloth was exempted from sales tax under a certain notification to be referred to hereinafter in this judgment. He, however, imposed sales tax on the sale of hosiery goods, namely, banyans. The contention on behalf of the assessee was that under the notification dated 1st July, 1959, sale of hosiery banyans was also exempt from sales tax, This contention was repelled by the appellate authority as also by the Deputy Commissioner of Commercial Taxes in revision. The assessee filed a second revision before the Commercial Taxes Tribunal. Agreeing with the departmental authorities, the Tribunal has upheld the imposition of sales tax on the sale of hosiery banyans. Hence this reference.

(3.) Notification No. STGL-AR-107/59--9134-F. T. dated 1st July, 1959, was Issued by the Governor of Bihar in exercise of his powers under Section 4(3)(a) of the Act. He was pleased to exempt the goods specified in the second column of Schedule III annexed to the notification from the levy of both "general sales tax" and "special sales tax". Item No. 23 of Schedule III reads as follows: Cotton fabrics, rayon or artificial silk fabrics, woollen fabrics, sugar and tobacco, as defined in the Additional Duties of Excise (Goods of Special Importance) Act, 1957, and handloom cloth excluding pure mill cloth. Another notification dated 5th August, 1959, was issued by the Governor of Bihar adding certain items to Schedule III of the old notification. This notification was given a retrospective effect and it came into force from 1st July, 1959, the day on which the first notification came into force. Item 27 added to Schedule III enumerates various items, such as, handkerchiefs, towels, napkins, etc. The tenth sub-item of item 27 is "hosiery cloth sold in lengths". The notification dated 19th October, 1966, which was made to come into operation with effect from 1st October, 1966, was issued adding to the Third Schedule item 32, which reads: Cotton, silk and cotton-silk mixed hosiery goods. On the face of the three notifications, therefore, it. would be noticed that in express language "hosiery cloth sold in lengths'" was excluded from the levy of sales tax with effect from 1st July, 1959, by including such article in item 27 of Schedule III, and cotton hosiery goods were also excluded with effect from 1st October, 1966, The period of assessment in question is 1964-65. On the face of these three notifications, therefore, it would be noticed that hosiery goods, namely, banyans, were not excluded from the levy of sales tax in the year 1964-65.