Woollen cloth exemption preserved for woven handloom mufflers and scarfs, as garment-like use did not change their legal character.

Woven woollen handloom mufflers or scarfs were treated as woollen cloth, not as taxable woollen goods, because the articles were woven and not machine-knitted hosiery, and there was no material showing any further process converting them into garments. The Court distinguished cloth from clothes and held that mere size or suitability for use as a garment does not alter the character of woven cloth. It also applied the rule that a specific exemption notification prevails over a more general taxing notification, so the exemption was not overridden. The assessee's claim to exemption was therefore accepted.

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Issues: Whether woven woollen handloom mufflers or scarfs purchased by the assessee were exempt as woollen cloth, or were liable to tax as woollen goods.

Analysis: The disputed goods were found to be woven articles and not machine-knitted hosiery. The Court drew a distinction between cloth and clothes, holding that mere size or suitability for use as a garment does not make woven cloth cease to be cloth. On the record, there was no material to show that the goods had been converted by any further process into clothes or garments. The Court also applied the principle that where a commodity is covered by a specific exempting notification, a more general taxing notification should not be construed to override that exemption.

Conclusion: Woven woollen handloom mufflers or scarfs purchased by the assessee were exempt from tax as woollen cloth, and the contrary view was rejected.

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