Sales tax exemption takes effect on commencement date; later rules do not delay operation or invalidate the levy.

An exemption entry under the Mysore Sales Tax Act became operative on its stated commencement date, and its effect was not postponed merely because rules 25A and 25B providing procedural machinery were framed later. Karadi oil sales could therefore qualify for exemption from the entry's commencement if the substantive conditions, including recognition of the producer, were met. The absence of rules allowing the dealer to pass the tax burden to purchasers did not affect the competence of the levy or invalidate the assessment. The petitions were allowed, the Tribunal's order was set aside, and the Deputy Commissioner's order was restored.

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Issues: (i) Whether sales of Karadi oil were exempt under entry 28 of the Fifth Schedule to the Mysore Sales Tax Act, 1957, for the assessment periods in question before the coming into force of rules 25A and 25B. (ii) Whether the absence of rules enabling the tax burden to be passed on to purchasers affected the validity of the assessment or the availability of the exemption.

Issue (i): Whether sales of Karadi oil were exempt under entry 28 of the Fifth Schedule to the Mysore Sales Tax Act, 1957, for the assessment periods in question before the coming into force of rules 25A and 25B.

Analysis: The exemption entry was amended with effect from 1 January 1959, and the amended language made exemption available to products of village industries sold by a bona fide producer recognised by the Commissioner. The later framing of rules 25A and 25B supplied the machinery for implementation, but the entry itself had already come into force. In the absence of those rules, the limits contemplated by the explanation were not rendered ineffective, and the Commissioner could still have been approached for recognition. The mere fact that the procedural rules were framed later did not postpone the operation of the exemption entry.

Conclusion: The exemption under entry 28 was available from its commencement, and the assessee was entitled to claim it if the substantive requirements were satisfied.

Issue (ii): Whether the absence of rules enabling the tax burden to be passed on to purchasers affected the validity of the assessment or the availability of the exemption.

Analysis: The ability to pass on sales tax to purchasers is not a necessary condition for the validity of a sales tax levy. The legislative choice to permit or withhold such recoupment does not affect the competence to impose the tax on the dealer. The assessment could not be invalidated merely because the relevant rules did not provide a mechanism for passing on the burden.

Conclusion: The absence of such rules did not invalidate the levy or defeat the assessee's challenge on that ground.

Final Conclusion: The petitions succeeded, the Tribunal's order was set aside, and the Deputy Commissioner's order was restored.

Ratio Decidendi: An exemption entry in a taxing statute becomes operative on its stated commencement date, and its implementation is not postponed merely because the subordinate rules prescribing procedural machinery have not yet been framed; likewise, the validity of a sales tax levy does not depend on the dealer being given a statutory right to pass the tax burden to purchasers.

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