1996 (2) TMI 502 - AT - VAT and Sales Tax

Cashmilon hosiery goods eligible for 3% tax rate under entry 20. Assessee must prove knitted wear status.

Nilgiris Chamber of Commerce and Industry Versus State of Tamil Nadu and Others

The Tribunal held that Cashmilon hosiery goods qualify for the reduced tax rate of 3% under entry 20 of the First Schedule, as they are considered hosiery ... - Issues:Interpretation of the term 'hosiery goods' under entry 20, Part B of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.Detailed Analysis:The case involves a prayer for a declaration that Cashmilon hosiery goods are eligible for the reduced tax rate of 3% as per a statutory notification. The notification reduces the tax rate from 5% to 3% for hosiery goods not made wholly or partly of wool. The goods in question, known as 'Cashmilon' hosiery goods, include knitted garments like socks, tops, sweaters, scarves, and mufflers. The relevant entries for consideration are S.No. 14, S.No. 18, and S.No. 20 of the First Schedule. Since the goods are not made wholly or partly of wool, S.No. 14 is not applicable. S.No. 18 specifically excludes hosiery goods, and S.No. 20 applies to hosiery goods not made wholly or partly of wool.The key issue is the interpretation of the term 'hosiery goods' under entry 20, Part B of the First Schedule. Previous judgments have provided insights into the broader meaning of hosiery goods. In one case, it was held that hosiery originally referred to knitted garments like socks and stockings but has now come to encompass knitwear more broadly. Another judgment stated that gloves made of hosiery cloth can be considered hosiery goods. The term 'hosiery' has evolved to include all knitwears like socks, banians, mufflers, etc. The samples of products produced in this case, such as mufflers, topies, pullovers, and socks, are knitted goods, meeting the requirements of hosiery goods.The Tribunal's decision clarifies that the knitted goods traded by the petitioners are covered by entry No. 20 of the First Schedule. However, the burden lies on the assessee to prove to the assessing officer that the goods are knitted wear and not made wholly or partly of wool to avail the benefit of the reduced tax rate. The order emphasizes the need for compliance and execution by all concerned parties.In conclusion, the Tribunal's judgment affirms that the Cashmilon hosiery goods qualify for the reduced tax rate of 3% under entry 20 of the First Schedule, provided they meet the criteria of being knitted wear and not made wholly or partly of wool. The decision underscores the importance of proper documentation and proof for availing tax benefits in such cases.