Statutory exemption and tax deduction rules must match the statute's scope; new revenue contentions cannot be raised in reference.

Statutory exemption provisions are confined to the goods and conditions expressly covered by the enactment and its schedule; hessian was not shown to fall within the exempted goods and remained liable to sales tax. A new contention not raised before the revenue authorities could not be introduced for the first time in a sales tax reference. The saving clause preserved earlier rules unless inconsistent with the later Act, and no inconsistency was found between the old declaration requirement and the new rule. The deduction claim for sales to registered dealers therefore failed, and the revenue view was sustained.

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Issues: (i) Whether hessian fell within the exempted scheduled goods covered by the Bombay Sales Tax Laws (Special Exemptions) Act, 1957, so as to escape liability under the Bombay Sales Tax Act, 1953. (ii) Whether the sales tax reference concerning the Bihar Sales Tax Act could be reopened on a new contention not raised before the revenue authorities, and whether the claim for deduction on account of sales to registered dealers was rightly rejected.

Issue (i): Whether hessian fell within the exempted scheduled goods covered by the Bombay Sales Tax Laws (Special Exemptions) Act, 1957, so as to escape liability under the Bombay Sales Tax Act, 1953.

Analysis: The exemption scheme was held to apply only to the classes of goods specifically covered by the statutory schedule and the legislative object disclosed by the preamble. The Act was understood as operating in relation to goods made liable to additional duty of excise and to specified handloom textiles and other scheduled goods. Hessian was not shown to be subject to such additional excise duty, and its separate treatment in the sales tax schedule indicated that it was not intended to be assimilated to the exempted varieties of cloth.

Conclusion: Hessian was not exempt and remained liable to sales tax; the assessee's contention failed.

Issue (ii): Whether the sales tax reference concerning the Bihar Sales Tax Act could be reopened on a new contention not raised before the revenue authorities, and whether the claim for deduction on account of sales to registered dealers was rightly rejected.

Analysis: The reference was confined to the questions lawfully arising from the record, and a new contention not urged before the appellate or revisional revenue authorities was not permitted to be raised for the first time in the reference. The saving provision preserved earlier rules unless they were inconsistent with the new Act, and no inconsistency was found between the old rule requiring declarations and the later rule framed under the new Act. On that basis, the deduction claim was not established.

Conclusion: The new contention could not be entertained, and the rejection of the deduction claim was upheld.

Final Conclusion: The revenue's view was sustained on the exemption question and on the Bihar sales tax questions, and the assessee obtained no relief.

Ratio Decidendi: A statutory exemption must be confined to the goods and conditions expressly covered by the enactment, a new legal contention not raised before the revenue forums cannot ordinarily be introduced for the first time in reference, and saved rules continue unless they are inconsistent with the later Act.

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