Sales tax exemption for medicinal preparations failed where earlier excise references could not be read into the later Central levy scheme.

Sales tax exemption for medicinal preparations could not be claimed by reading references in earlier entries to repealed excise and prohibition laws as references to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. Section 8 of the General Clauses Act, 1897 applies only where a former provision is repealed and re-enacted, so that the repealed provision is construed by reference to the new one; it does not extend an exemption where the legislative scheme has changed. The earlier enactments did not impose duty on medicinal preparations in the same sense as the 1955 Act, and the shift from State levy to Central levy defeated substitution of references. The turnover was therefore correctly subjected to sales tax.

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Issues: Whether the turnover of medicinal preparations was exempt from sales tax on the ground that the references in the sales tax entries to the earlier excise and prohibition laws had to be read, by virtue of section 8 of the General Clauses Act, 1897, as references to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955.

Analysis: The exemption provisions applied only to goods on which duty was or might be levied under the specified enactments, and not to goods in the manufacture of which alcohol had been used and on which duty had been paid on the alcohol ingredient. The Court held that section 8 of the General Clauses Act, 1897, operates only where a former provision is repealed and re-enacted, and only the repealed provision can then be read as the corresponding re-enacted provision. The relevant earlier enactments did not contain a provision imposing duty on medicinal preparations in the same sense as the 1955 Act, and the 1955 Act did not re-enact the State's earlier power to levy duty on such preparations. The different legislative scheme and the shift from State levy to Central levy negatived the claimed substitution of references.

Conclusion: The exemption claim failed, and the petitioner was rightly assessed to sales tax on the turnover of medicinal preparations.

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