Conditional industrial tax exemption is not a general exemption for section 8(2-A), preserving Central sales tax liability.

Section 8(2-A) of the Central Sales Tax Act applies only when goods are exempt from tax generally under the State sales tax law; a conditional exemption tied to the type of industrial unit or a limited production period is not enough. The Jammu and Kashmir Government Order granted relief only to large or medium industrial units and only for a specified time from commencement of production, so it operated as a conditional exemption rather than a general exemption for the goods themselves. The earlier contrary interpretation was treated as a manifest error of law, and the Revenue's position on the applicability of Central sales tax was upheld.

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Issues: Whether the exemption granted by the Jammu and Kashmir Government Order to a large or medium scale industrial unit amounted to goods being exempt from tax generally under the State law so as to attract section 8(2-A) of the Central Sales Tax Act, 1956.

Analysis: Section 8(2-A) applies only where the sale or purchase of goods is exempt from tax generally under the appropriate State sales tax law, and not where the exemption operates only in specified circumstances or under specified conditions. The exemption under the Government Order was linked to the nature of the industrial unit and the limited period from commencement of production, not to the goods as such. It therefore operated as a conditional exemption and not as a general exemption. The earlier decision proceeding on the contrary interpretation was held to suffer from a manifest error of law and to be inconsistent with the binding understanding of section 8(2-A).

Conclusion: The exemption was not a general exemption within section 8(2-A) of the Central Sales Tax Act, 1956, and the review on that issue was allowed in favour of the Revenue.

Final Conclusion: The Court corrected the earlier interpretation of section 8(2-A), upheld the Revenue's position on the applicability of Central sales tax, and disposed of the review petitions and connected appeals accordingly.

Ratio Decidendi: An exemption tied to specified conditions or to a particular industrial unit is not an exemption from tax generally for the purposes of section 8(2-A) of the Central Sales Tax Act, 1956.

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