Jaipur Hosiery Mills (P) Ltd., Jaipur
Vs. The State of Rajasthan & Ors  INSC 110 (27 April 1970)
27/04/1970 GROVER, A.N.
CITATION: 1971 AIR 1330 1971 SCR 396
R 1976 SC 670 (24) RF 1986 SC1085 (14) R 1990
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.
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 under wears,
(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 under wears 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 under wears came under
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 whether vests and under wears
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]
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
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 manufacture 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. 41in 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 under wears 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 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.