Exemption for goods subject to duty failed where the levy was only on denatured spirit used in manufacture.

Section 4 exemption under the Madras General Sales Tax Act, 1939 applied only where the goods themselves were subject to duty under the Madras Prohibition Act, 1937. A gallonage fee on denatured spirit used in manufacturing French Polish was only a levy on the input, not on the finished French Polish. Since French Polish was a separate manufactured commodity and the statutory condition required a duty on the goods claimed as exempt, the exemption was unavailable and sales tax liability remained.

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Issues: Whether the levy of a gallonage fee on denatured spirit used in manufacturing French Polish amounted to a duty on French Polish so as to attract the exemption under section 4 of the Madras General Sales Tax Act, 1939.

Analysis: The exemption under section 4 applied only where the goods themselves were subject to duty under the Madras Prohibition Act, 1937. The materials relied upon showed only that a licence fee or gallonage fee was payable on denatured spirit used in manufacture. French Polish was a separate manufactured commodity, and the fee on the input did not amount to a levy on the finished product. On that basis, the statutory condition for exemption was not satisfied.

Conclusion: The petitioner was not entitled to exemption from sales tax, and liability under the Madras General Sales Tax Act, 1939, remained.

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