P. Kanniappan (Died) and Others vs The State of Tamil Nadu

Ramanujam, J.—In these tax cases the view taken by the Tribunal that the gloves made of hosiery cloth or cotton cloth sold by the assessee

falls under entry 86 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, hereinafter referred to as the Act and are taxable at 5

per cent, has been challenged by the legal representatives, i.e., petitioners two to eleven abovementioned. According to the petitioners, the gloves

made of cotton cloth or hosiery cloth will not fall under the said entry, but will fall under the notification in G.O. No. 1328, Revenue, dated 30th

March, 1963, issued u/s 17 of the Act, which prescribed for 2 per cent tax with effect from 1st July, 1967. As regards the turnover of Rs.

3,00,861, which is in dispute in this case, the assessing authority held that the items sold by the assessee cannot be taken to be ""ready-made

goods"". But it has been treated as coming under the multipoint scheme. The said view of the assessing authority was, however, not accepted by the

Appellate Assistant Commissioner and he has held that the gloves sold by the assessee should be taken to be hosiery goods, which are covered by

entry 86 of the First Schedule to the Act and as such they are liable to be charged at 5 per cent single point. On a further appeal by the assessee to

the Tribunal, the Tribunal has accepted the view taken by the Appellate Assistant Commissioner and has upheld the charge under entry 86 of the

First Schedule. According to the Tribunal, gloves sold by the assessee will fall under category of ""hosiery goods"" and therefore they should be

taken to fall under entry of 86 of the First Schedule to the Act. The Tribunal also referred to a decision of the Allahabad High Court in Laxmi

Stores v. The Sales Tax Officer and Another [1983] 53 STC 244.

According to the learned counsel for the petitioners, the gloves sold by the assessee have to be treated as ""ready-made goods"" which is covered

by the exemption granted by the notification in G.O. No. 1328, Revenue, dated 30th March, 1963 which prescribed a lesser rate of tax, and that

the same will not fall under entry 86 of the First Schedule as has been held by the Tribunal. However, we are not in a position to agree with the

learned counsel for the petitioners that the gloves can be treated as ""ready-made goods"". It is not in dispute that the gloves sold by the assessee are

knit and once the gloves are knit, they become saleable and no further labour is involved so as to say that the goods are ""ready-made goods"". It is

no doubt true that the gloves sold by the assessee is made of cloth; but it cannot be said to be ready-made goods. If that is so, almost all the

taxable goods such as saree, dhothi, etc., will come under ""ready-made goods"", apart from ""garments"" which can really be said to be ready-made

goods. According to the learned counsel for the petitioners, normally the word ""hosiery"" is a term which could be used with reference to socks

which are used to cover the feet or the legs and therefore gloves which are normally used to cover the fingers or the forearm will not fall within the

term ""hosiery"". However, we are of the view that the expression ""hosiery"" has now to acquire a wider meaning to cover all knit-wears such as

socks, banians, mufflers, etc. In a sense the term ""hosiery"" can now be understood as including all goods knitted for the purpose of portions of the

body. In Laxmi Stores v. The Sales Tax Officer and Another [1983] 53 STC 244 hosiery has been understood as including underwear or

underclothing, i.e., articles which are used next to skin. The Rajasthan High Court in Jaipur Hosiery Mills (P) Ltd., Jaipur Vs. The State of

Rajasthan and Others, has held that ""hosiery"" means machine-knitted garments. In view of this, we are not, therefore, inclined to accept the

contention of the learned counsel for the petitioners that the gloves sold by the assessee had to be treated as ""ready-made goods"" made of cotton

and cannot be treated as ""hosiery"" coming under entry 86 of the First Schedule to the Act. We are of the view that the Tribunal has come to the

right conclusion in these cases. The tax cases are therefore dismissed.