Textile exemption limited to goods in the First Schedule; bedsheets and towels were held taxable under the residuary entry.

Bedsheets, bedspreads, terry towels and napkins were held not to fall within the sales tax exemption for textiles under entry 3 of the Fifth Schedule to the Karnataka Sales Tax Act, 1957, because that exemption was limited to textiles described in the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957. Although the goods were textile products, they were more specifically classifiable as bed linen, table linen and toilet linen under Heading 63.02 of the Central Excise Tariff Act, 1985, and that heading was not covered by the First Schedule. They therefore fell within the taxable residuary entry 7A of Part T of the Second Schedule, and the revisional authority's view was upheld.

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Issues: Whether bedsheets, bedspreads, terry towels and napkins were exempt from tax under entry 3 of the Fifth Schedule to the Karnataka Sales Tax Act, 1957, or were taxable under entry 7A of Part T of the Second Schedule.

Analysis: The exemption in the Fifth Schedule was confined to textiles described in the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The goods in question, though broadly textile goods, were found to be more specifically classifiable as bed linen, table linen and toilet linen under Heading 63.02 of the Central Excise Tariff Act, 1985. That heading was not included in the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957, and therefore those goods did not answer the description adopted for the sales tax exemption. The statutory scheme showed that only textiles described in the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957 were exempt, while other textiles and fabrics fell within the taxable residuary entry.

Conclusion: The goods were not exempt under entry 3 of the Fifth Schedule and were liable to tax under entry 7A of Part T of the Second Schedule. The view of the revisional authority was upheld.

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