Tax exemption classification for hosiery products upheld as rational and non-discriminatory under Article 14.

An exemption notification excluding hosiery products from sales tax relief for low-value garments was upheld because the State has wide discretion in taxation to classify goods for exemption, and such classification is valid if it has a rational basis. Hosiery products were treated as a separate class of knitted articles, and no material showed hostile discrimination or lack of rational nexus. The notification was therefore not violative of Article 14, and the constitutional challenge failed.

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Issues: (i) Whether the exemption notification excluding hosiery products from the sales tax exemption for garments valued at not more than Rs. 4 per piece was discriminatory and violated Article 14 of the Constitution.

Analysis: The notification was issued under section 4(2) of the Rajasthan Sales Tax Act, 1954, which empowered the State Government to exempt goods or classes of goods in public interest. In taxation matters the State has wide discretion to select the goods to be taxed or exempted, and a classification is not invalid merely because some goods are exempted while others are not. The exemption here drew a distinction between garments generally and hosiery products, which were treated as a separate class of knitted articles. No material was shown to establish hostile discrimination or absence of a rational basis for the classification.

Conclusion: The notification was not violative of Article 14 and the challenge failed.

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