1state of Karnataka vs H.B. Porwal and Sons, Belgaum

V. Gopala Gowda, J.-The correctness of the order of the Karnataka Appellate Tribunal (hereinafter referred to as ''KAT'' for short), passed in S.T.A. No. 199 of 2005, dated 16-8-2006 by partly allowing the appeal and deleting the levy of tax on the entry of raincoats treating the same as ready-made garments and further directing the Assessing Authority to recompute the value of goods liable to entry tax and issue revised notice of demand, by recording reasons at para 5 of the judgment holding that ''ready-made garments'' are clothing of daily or casual wear, but does not include ''raincoats'', is under challenge in this revision petition by the petitioner by framing the following three substantial question of law, urging various grounds in support of the same and prayed to answer the following question of law in favour of the revision petitioner:

"In the facts and circumstances of the case, whether the Tribunal was justified in giving a finding that the raincoats are not ready-made garments and cannot be subjected to levy entry tax under Notification No. FD 199 CSL 02(2), dated 1-10-2002?"

The learned Additional Government Advocate question the correctness of the impugned order placed reliance upon the Notification No. FD 199 CSL 02(2), dated 1-10-2002 issued by the State Government in exercise of its power under Section 13(5) of the Karnataka Tax on Entry of Goods Act, 1979 (hereinafter referred to as the ''KTEG Act'' for short) and also placed strong reliance upon the Dictionary meaning of ready-made coat or raincoats at sub-paras (1) to (4) of Para 2 of the petition, which reads thus:

"2. The words "raincoats" and "ready-made garments" are not defined under the Karnataka Sales Tax Act, 1957 or under the KTEG Act. Hence, in order to understand the meaning of raincoats and ready-made garments if a reference is made to the dictionary meaning, ready-made garments is defined under the New Shorter Oxford English Dictionary of 1993 as under:

(1) Readymade: made in a finished state (especially of clothing) made to a standard size and specification, not to the order of a purchaser; dealing in or pertaining to ready-made articles especially of clothing;

(2) Garment is defined as an article of dress in plain clothes the outward and visible covering of anything;

(3) Coat is defined as an outer garment usually made up of cloth and having long sleeved outdoor garment worn over indoor clothes for warmth;

(4) Raincoat is defined as a waterproof or shower proof coat worn as protection against rain".

2-A. Further, the learned Counsel placed strong reliance upon the decision of the Madhya Pradesh High Court in the case of Commissioner of Sales Tax, Madhya Pradesh, Indore v M/s. Mahajan Brothers, (1963)14 STC 808 (MP) (DB), wherein, the said Court stated the meaning of Garment, Raincoat etc., taking from the Dictionary meaning and also following the judgment of the Supreme Court in the case of Ramavatar Budhaiprasad v Assistant Sales Tax Officer, Akola and Another, (2004)1 SCST 871, which has given a reasonable meaning of the ready-made garments and further placed reliance upon another judgment of Supreme Court in the case of Collector of Central Excise v India Waterproofing and Dyeing Works, (2003)132 STC 99 (SC), wherein the Apex Court after interpretation of the provisions of the Central Excise Act, 1944 and Rules with reference to the Tariff Act at page 99, it has held that raincoats and caps fall under item 22-D of the Central Excise Act with reference to the articles of ready to wear apparel (commercially known as ready-made garments).

We have carefully examined the decisions of the Supreme Court and Madhya Pradesh High Court. Keeping in view the definition of the ''raincoat'' in the context of ready-made, which is as per the Dictionary meaning is a waterproof or shower proof coat worn as protection against rain. ''Garment'' according to Dictionary meaning as extracted above is an article of dress in plain clothes, the outward and visible covering of anything. Though raincoat is a ready-made one it cannot be considered as a garment in view of the Dictionary meaning as extracted above. That is what exactly stated by the Tribunal in its order and granted the relief in favour of the assessee. The reliance placed upon the decision of the Supreme Court and Madhya Pradesh High Court by the learned Additional Government Advocate with regard to the meaning of ready-made garment and raincoat etc., cannot be applied to the fact situation. Particularly having regard to the decision in the case of Collector of Central Excise, for the reasons that raincoat is not included in the Schedule of the Act and the raincoat also cannot be treated as a garment in view of the Dictionary meaning referred to supra. We are in agreement of the view taken up by the KAT in granting the relief to the assessee. Therefore, the substantial question of law which is extracted above does not arise in this case. Hence, the civil revision petition must fail.

Accordingly, the petition is dismissed without costs.

[2008](1)kar.l.j. 13

KARNATAKA MUNICIPALITIES ACT, 1964, Section 365(1) - Appointment of officers belonging to Karnataka Municipal Administrative Service under local authorities - Posts under local authorities specified for - Having specified particular post under local authority for such appointment, it is not open to State Government to Post Officer not belonging to said service to such post in place of officer belonging to said service - Such appointment, held, is arbitrary and illegal.

Cyriac Joseph, C.J. and Ashok B. Hinchigeri, J., Held: According to sub-section (1) of Section 365 of the Karnataka Municipalities Act, 1964, notwithstanding anything contained in the Act or in any other law for the time being in force, such posts under every local authority as may be specified by Government shall be filled by appointment of officers belonging to the Karnataka Municipal Administrative Service. The Government of Karnataka had issued Order No. HUD 110 EMC 95(I), dated 5-3-1996 notifying the City Municipal Councils which are legally entitled to have a Municipal Commissioner, Grade I borne on the Karnataka Municipal Administrative Service. Urban Development Authority, Shimoga is one of such City Municipal Councils notified by the Government as per order dated 5-3-1996. Hence only an officer belonging to the Karnataka Municipal Administrative Service shall be appointed as Commissioner, Urban Development Authority, Shimoga. The 3rd respondent is not a member of the Karnataka Municipal Administrative Service. He is an officer belonging to the Karnataka Co-operative Administrative Service. Therefore, the 3rd respondent is not eligible to be appointed as Commissioner of Shimoga Urban Development Authority. . . . . The petitioner is admittedly an officer belonging to the Karnataka Municipal Administrative Service. Government Advocate could not point out any valid reason for replacing an officer belonging to the Karnataka Municipal Administrative Service with an officer of the Karnataka Co-operative Administrative Service as Commissioner, Shimoga Urban Development Authority. Hence the posting of the 3rd respondent as Commissioner, Shimoga, Urban Development Authority, in the place of the petitioner was illegal and arbitrary and was liable to be quashed by the Karnataka Administrative Tribunal. [Para 3 and 4]