Proportionate sales tax exemption for coconut oil and cake applies only to purchase-linked turnover, not blanket immunity.

An exemption notification under section 6 of the General Sales Tax Act, 1125, was construed strictly according to its wording and held to grant only a proportionate tax benefit linked to the purchase of coconuts or copra used to produce an equivalent quantity of coconut oil and cake. The exemption did not operate as blanket immunity for all intra-State sales of oil and cake; instead, it was limited to the amount of tax assessed or assessable on the relevant purchase turnover, as computed under the prescribed conversion table. Where the assessee had purchased local copra for the required output, relief was confined to that extent only.

---

---

Issues: Whether the exemption notification issued under section 6 of the General Sales Tax Act, 1125 exempted the assessee's entire intra-State sales of coconut oil and cake, or only to the extent of the tax assessed or assessable on the purchase of copra used for producing an equivalent quantity of oil and cake.

Analysis: The notification was construed according to its plain wording. It granted exemption only to the extent of the amount for which the miller was assessed or liable to assessment on the purchase of coconuts or copra necessary for producing an equivalent quantity of coconut oil and cake, as computed by the prescribed conversion table. On that construction, the exemption operated not as a complete immunity from tax on all sales, but as a deduction from the tax payable on the corresponding sales of oil and cake. Since the assessee had purchased local copra sufficient to produce the relevant quantities, it was entitled only to the extent of the tax relatable to such purchase turnover.

Conclusion: The notification did not exempt the assessee's entire intra-State sales; the exemption was confined to the amount permitted by the purchase-side assessment or liability to assessment, and the assessee succeeded only partly.

Ratio Decidendi: A tax exemption notification tied to the purchase of raw material for producing an equivalent quantity of goods grants only a proportionate deduction from sales tax, and not a blanket exemption, unless the language clearly so provides.

---