Writ maintainability and hosiery classification: excise notices failed where undergarments fell within the specific statutory exclusion.

A writ challenge to excise notices was stated to be maintainable where the notice was alleged to lack legal foundation and non-compliance could attract penal consequences, even though an appellate remedy existed under Section 35. On classification, banians and jangias were treated as frame-knitted undergarments falling within hosiery, so they were covered by the specific exclusion in Item 22D of the First Schedule and could not be shifted into the residuary Item 68. The stated effect was that the impugned excise demands were unsustainable and the notices were liable to be quashed.

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Issues: (i) whether the writ petitions challenging the excise notices were maintainable despite the availability of an appellate remedy; and (ii) whether banians and jangias were articles of hosiery exempt from taxability under Item 22D of the First Schedule to the Central Excises and Salt Act, 1944, so as to be outside Item 68.

Issue (i): whether the writ petitions challenging the excise notices were maintainable despite the availability of an appellate remedy.

Analysis: A notice demanding compliance with a statutory obligation can be challenged where the notice is said to have no legal foundation and non-compliance may entail penal consequences. The existence of an appeal under Section 35 of the Central Excises and Salt Act, 1944, does not by itself bar recourse to constitutional writ jurisdiction in such a situation.

Conclusion: The writ petitions were maintainable.

Issue (ii): whether banians and jangias were articles of hosiery exempt from taxability under Item 22D of the First Schedule to the Central Excises and Salt Act, 1944, so as to be outside Item 68.

Analysis: Item 22D specifically covered articles of ready-to-wear apparel, including undergarments and body-supporting garments, but expressly excluded articles of hosiery. Item 68, being a residuary entry, applied only to goods not elsewhere specified in the relevant sense and could not be used to bring within taxability goods which had already been specifically dealt with by an earlier entry, whether for taxability or exemption. Banians and jangias were frame-knitted undergarments and therefore fell within hosiery. A special statutory exclusion could not be overridden by the general residuary item, and an exemption granted under Rule 8(1) could not alter the statutory position under Item 22D.

Conclusion: Banians and jangias were articles of hosiery exempt from excise duty under Item 22D and did not attract Item 68.

Final Conclusion: The impugned excise notices were unsustainable, the petitions succeeded, and the challenged demands stood quashed.

Ratio Decidendi: Where a statute specifically excludes a class of goods from an entry, the same goods cannot be brought within a residuary entry merely because they are not otherwise taxable; a special statutory exemption prevails over a general residuary provision.

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