In Brief
A dealer purchased textile material in bulk and sold cut, embroidered ladies' suits (unstitched) to customers. The tax authorities disagreed on classification: the assessing authority applied 12.5% (residuary entry), the appellate authority applied 4% (textile made-ups), and the tribunal exempted it as 'textile.' The Supreme Court held that the product is neither exempt textile nor a textile made-up (which must be stitched), but falls under the residuary entry at 12.5%. Once textiles are cut to suit size and embroidered for a specific garment, they lose their character as raw textile and assume a distinct identity. The court reversed the High Court's decision and restored the assessing authority's order, holding that 'other textile made-ups' must be read with related items (bedsheets, pillow covers), not as a standalone entry.
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