Composite taxing scheme: later rate notification can withdraw earlier exemption for ice-cream without separate revocation.

Under the U.P. Sales Tax Act, a later notification prescribing a tax rate for ice-cream was treated as withdrawing an earlier exemption for milk and milk products. The text explains that sections 3, 3-A and 4 operate as a composite taxing scheme, so a subsequent rate notification for goods previously exempted can indicate an intention to end the exemption without a separate revocation notification. On that basis, the turnover relating to ice-cream was held taxable and the contrary orders were set aside.

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Issues: Whether a later notification prescribing a rate of tax for ice-cream under section 3-A of the U.P. Sales Tax Act, 1948 withdrew the earlier exemption granted to milk and milk products under section 4, and whether the turnover relating to ice-cream was taxable.

Analysis: The exemption notification dated 21 May 1974 treated milk and milk products as exempt. Subsequent notifications under section 3-A dated 4 November 1974 and 30 May 1975 expressly prescribed a rate of tax for ice-cream. The controlling principle applied was that sections 3, 3-A and 4 form part of one taxing scheme, so a later rate notification for goods earlier exempted manifests an intention to withdraw the exemption, even without a separate revocation notification.

Conclusion: The later notifications under section 3-A withdrew the exemption available to ice-cream, and the turnover was liable to sales tax.

Final Conclusion: The review petition succeeded, the contrary orders were set aside, and the assessment treating the ice-cream turnover as taxable stood restored.

Ratio Decidendi: Where a taxing statute treats exemption and rate notifications as parts of a composite scheme, a later notification prescribing tax on goods earlier exempted is sufficient to withdraw the exemption without a separate express revocation.

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