Cloth classification for stiff collars upheld, with minor plastic components not altering their concessional tax treatment.

Stiff collars made predominantly of cloth, with only negligible plastic or polythene components used for stiffness, were treated as readymade goods made of cloth for the concessional sales tax notification. The essential character remained cloth because the outer and inner layers, and the processed buckram cloth, formed the substantive material, while minor plastic parts did not create a new commodity. Processing also did not alter that classification. The revision-based reassessment was unsustainable because it departed from the earlier concessional treatment without independent material justifying the change.

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Issues: Whether stiff collars, composed substantially of cloth with a small plastic or polythene component, were "readymade goods made of cloth" entitled to concessional rate under the notification issued under section 17 of the Tamil Nadu General Sales Tax Act, 1959, and whether the reassessment by revision was justified.

Analysis: The article was found to be made predominantly of cloth, the cloth element forming the outer and inner layers and the processed buckram cloth constituting the essential material, while the polythene band and small plastic pieces were negligible accessories used only to impart stiffness. A minor plastic component did not change the essential character of the goods, and the presence of processing did not convert cloth into a different commodity. The earlier concessional treatment had been allowed on the same material, and the revision was unsupported by any independent material to justify departure from the original view.

Conclusion: The stiff collars were readymade goods made of cloth and were entitled to the concessional rate; the revisional orders were unsustainable.

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