Strict compliance with tax exemption conditions bars concessional rate where yarn is despatched outside the State.

A party seeking a tax concession under a notification must satisfy every condition strictly, and the benefit cannot be extended beyond its express terms. Where the notification prohibited despatch of yarn outside the State through inter-State transactions, consignment basis, or ex-State commission agents, any such despatch defeated entitlement to the concessional rate. The record showed inter-State sales and out-of-State despatches, including entries in the returns, so the exemption could not be claimed. In view of this clear breach, it was unnecessary to examine whether the mill was established before 1 December 1979 or whether it otherwise qualified as a textile mill.

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Issues: Whether the respondents were entitled to the concessional rate of tax under the notification issued under section 5(1) of the Punjab General Sales Tax Act, 1948 despite despatch of yarn outside the State in violation of the notification conditions.

Analysis: The concessional notification was available only if the statutory conditions were strictly satisfied. Clause (ii) was held to be clear and unambiguous: the mill was not to despatch yarn in the course of inter-State transaction on consignment basis or through ex-State commission agents. The record showed inter-State sales and despatches outside the State, and the respondents themselves had reflected such transactions in their returns. Once despatch outside the State occurred, the benefit of the notification could not be claimed. In view of this clear breach, it was unnecessary to decide whether the mill had been established before 1 December 1979 or whether it qualified as a textile mill.

Conclusion: The respondents were not entitled to the benefit of the notification and the concessional rate of tax.

Ratio Decidendi: A party claiming the benefit of a taxing exemption or concession notification must strictly satisfy every condition in the notification, and where the language is clear, the benefit cannot be extended contrary to its express terms.

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