Rayon fabric exemption upheld for rayon cord strapping; writ jurisdiction retained despite alternate statutory remedy.

An exemption entry for rayon fabrics was interpreted to cover goods made wholly or substantially from rayon or artificial silk, not a single specific article. Applying that material-composition approach, caristrap rayon cord strapping was treated as fabricated essentially and substantially from rayon and was held exempt from sales tax. On writ jurisdiction, the existence of an alternate statutory remedy did not justify refusal under Article 226 because the petitions had already been entertained, notice issued, and the matters heard on merits after substantial delay. The assessment challenge therefore succeeded and the impugned judgment was set aside.

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Issues: (i) Whether caristrap rayon cord strapping is rayon fabric within item 7 of the Third Schedule to the Kerala General Sales Tax Act, 1963 read with item 22 of the First Schedule to the Central Excises and Salt Act, 1944 and therefore exempt from sales tax. (ii) Whether the Court should decline to exercise jurisdiction under Article 226 of the Constitution of India on the ground of availability of statutory remedies.

Issue (i): Whether caristrap rayon cord strapping is rayon fabric within item 7 of the Third Schedule to the Kerala General Sales Tax Act, 1963 read with item 22 of the First Schedule to the Central Excises and Salt Act, 1944 and therefore exempt from sales tax.

Analysis: The exemption entry was held to cover all varieties of fabrics manufactured wholly or partly from rayon or artificial silk. The expression 'rayon fabric' was treated as describing goods made out of rayon and not as a single specific article. The Court rejected application of the identity test and the narrow common parlance approach relied on by the Revenue. On the facts, the strapping was manufactured practically exclusively from rayon cords and was held to be fabricated out of rayon essentially and substantially.

Conclusion: Yes. Caristrap rayon cord strapping is rayon fabric and is exempt from tax under item 7 of the Third Schedule to the Act.

Issue (ii): Whether the Court should decline to exercise jurisdiction under Article 226 of the Constitution of India on the ground of availability of statutory remedies.

Analysis: Although an alternate statutory remedy existed, the writ petitions had already been entertained, notice had been issued, and the matters had been heard on merits after substantial delay. In those circumstances, the Court declined to refuse jurisdiction at that stage and proceeded to decide the controversy.

Conclusion: No. The Court did not decline jurisdiction under Article 226.

Final Conclusion: The assessment challenge succeeded, and the impugned judgment was set aside by holding that the goods in question fell within the sales tax exemption.

Ratio Decidendi: Where an exemption entry describes goods by their material composition rather than as a single specific article, the question is whether the goods are manufactured essentially and substantially from the exempted material, and a writ court may retain jurisdiction where the petition has already been entertained and heard on merits despite an available statutory remedy.

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