Sales tax exemption on medicinal preparations failed where excise duty applied only to spirit content, not the preparations themselves.

Exemption from sales tax under section 4 of the Madras General Sales Tax Act, 1939 was available only where duty had been levied under the Madras Prohibition Act, 1937 on the goods themselves. Although medicinal preparations were exempted under section 16 of the Prohibition Act and the notification issued under it, excise duty was chargeable only on the spirit contained in those preparations, not on the preparations as a whole. On that basis, the assessee could not show payment of excise duty on the medicinal preparations themselves, and the claimed exemption failed. The alternative plea for exemption to the extent of spirituous content was not entertained because it had not been raised below and the relevant content was not established.

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Issues: Whether the assessee was entitled to exemption from sales tax under section 4 of the Madras General Sales Tax Act, 1939 on the footing that excise duty had been paid on the medicinal preparations under the Madras Prohibition Act, 1937.

Analysis: Section 4 of the Madras General Sales Tax Act, 1939 excluded from tax only those goods on which duty was levied under the Madras Prohibition Act, 1937. Under section 16 of the Madras Prohibition Act, 1937 and the notification issued thereunder, medicinal preparations were exempted from the operation of the Act, but duty was chargeable only on the spirit contained in such preparations and not on the preparations as a whole. The assessee, therefore, could not be said to have paid excise duty on the medicinal preparations themselves. The further plea for exemption at least to the extent of the spirituous content was not entertained, as it had not been raised below and the actual spirituous content was not established.

Conclusion: The assessee was not entitled to the claimed exemption, and the revisional challenge failed.

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