General tax exemption under CST law requires complete removal from the tax net, not stage-based relief after earlier levy.

Section 8(2A) of the Central Sales Tax Act, 1956 applies only where goods are exempt from tax generally, not where relief is limited to a single stage or conditional exemption. The commentary explains that tanned hides and skins, though already taxed in raw form under the State sales tax scheme, remained within the tax net and were only protected from further levy after earlier collection. The State refund mechanism and the interaction with sections 14 and 15 of the Central Sales Tax Act supported that view. Accordingly, such goods did not qualify for the nil rate under section 8(2A), and the proper relief was reimbursement of tax already paid.

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Issues: Whether tanned hides and skins, having already suffered tax under the State sales tax law in their raw form, are exempt from tax generally so as to attract the nil rate under section 8(2A) of the Central Sales Tax Act, 1956.

Analysis: The expression "exempt from tax generally" in section 8(2A) was read with its explanation, which excludes cases where exemption operates only in specified circumstances, under specified conditions, at specified stages, or otherwise than with reference to turnover. Hides and skins were held to be declared goods under the State law and were placed in the Third Schedule, which provided for single-point taxation under section 6 of the Andhra Pradesh General Sales Tax Act, 1957. The scheme of the State Act, the refund provision for tax already levied, and the corresponding provisions in sections 14 and 15 of the Central Sales Tax Act, 1956 showed that such goods were not wholly exempt from tax, but only relieved from further levy after tax had already been collected at the earlier stage. The Court also held that the substituted form of section 8(2A) and the amendments to section 15 did not alter that position. The proper relief in such cases was reimbursement of tax already paid, not nil tax on the inter-State sale.

Conclusion: Tanned hides and skins that had suffered tax as raw hides and skins were not generally exempt from tax under the State law and did not qualify for nil rate under section 8(2A) of the Central Sales Tax Act, 1956.

Ratio Decidendi: A transaction is exempt from tax generally only when the goods are wholly outside the State tax net, and not where relief from levy operates only after tax has already attached at a specified stage or subject to a specified condition.

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