State sales tax exemptions must be reflected in Central sales tax computation under section 8(2), while alternative remedy may bar writ relief.

Section 8(2) of the Central Sales Tax Act requires Central tax to be computed by reference to the notional State sales tax position, so State-law exemptions attached to specified goods must be reflected in the calculation. The deeming fiction only treats the dealer as if the sale were intra-State; it does not nullify exemptions created by the State notification. Packing material for khandsari sugar, where not covered by the special class in section 8(1), falls under the general rule in section 8(2) and is taxed at the State rate. The text also notes that writ relief should not bypass an adequate statutory appellate remedy.

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Issues: (i) Whether, for computing tax under section 8(2) of the Central Sales Tax Act, 1956, exemptions granted under the State sales tax law in respect of specified goods were to be taken into account, so that a dealer exempted under the State notification could escape Central sales tax liability. (ii) Whether the turnover of packing material used for khandsari sugar was liable to be taxed at the special rate applicable under section 8(1) of the Central Sales Tax Act, 1956, or under the general rule in section 8(2). (iii) Whether the petition was maintainable in view of the existence of an adequate alternative appellate remedy.

Issue (i): Whether, for computing tax under section 8(2) of the Central Sales Tax Act, 1956, exemptions granted under the State sales tax law in respect of specified goods were to be taken into account, so that a dealer exempted under the State notification could escape Central sales tax liability.

Analysis: The provision in section 8(2) requires the Central tax to be computed at the same rates and in the same manner as if the sale had been inside the appropriate State, and the deeming fiction that the dealer is liable under the State law operates only to ignore the fact that the dealer is an inter-State dealer. The computation must therefore give effect not merely to the assessment machinery but also to State-law provisions that determine whether particular goods or sales are exempt. A dealer who is otherwise liable under the State law is still entitled, in computing the notional State tax, to have an exemption for the goods in question reflected in the calculation. The non-obstante clause was read as displacing only the minimum-turnover type of non-liability and not as cancelling exemptions attached to the goods themselves.

Conclusion: The exemption under the State notification had to be considered, and the assessee was not liable to Central sales tax on that turnover.

Issue (ii): Whether the turnover of packing material used for khandsari sugar was liable to be taxed at the special rate applicable under section 8(1) of the Central Sales Tax Act, 1956, or under the general rule in section 8(2).

Analysis: The special rate in section 8(1) applies only to the classes of sales specifically covered by that sub-section. Packing material sold otherwise than in the transactions described in section 8(1) does not attract that special rate. For such sales, the general computation rule in section 8(2) applies, and the rate is then taken from the State sales tax law.

Conclusion: The packing material was taxable at the rate applicable under the State law and not at the special rate under section 8(1).

Issue (iii): Whether the petition was maintainable in view of the existence of an adequate alternative appellate remedy.

Analysis: Even though the assessee succeeded on the substantive interpretation of section 8(2), the Court held that certiorari should not be used to bypass the ordinary departmental appellate remedy where such remedy was available and adequate.

Conclusion: The petition was not entertained and was dismissed on the ground of alternative remedy.

Final Conclusion: The substantive interpretation of section 8(2) favoured the assessee, but the writ petition ultimately failed because the Court declined to bypass the statutory appellate process.

Ratio Decidendi: In computing Central sales tax under section 8(2), State-law exemptions attached to the goods or sales must be taken into account, while the deeming fiction operates only to ignore the dealer's inter-State character and not to nullify all State-law exemptions.

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