Sales tax exemption for medicinal preparations failed where duty was no longer leviable under the repealed state levy.

Medicinal and toilet preparations were not exempt from sales tax under section 8 read with item 3 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959, because that exemption was confined to duty levied or leviable under the Madras Prohibition Act, 1937, as it stood when the sales tax law came into force. The excise duty on such preparations had already been repealed and re-enacted under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, and section 8 of the General Clauses Act, 1897, did not extend the later sales tax exemption to the earlier state levy in its pre-repeal form. The 1972 exemption notification did not apply to the relevant assessment years, so the assessments were upheld.

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Issues: Whether medicinal and toilet preparations manufactured by the assessees were exempt from sales tax under section 8 read with item 3 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959, on the footing that the excise duty payable under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, should be treated as duty leviable under the Madras Prohibition Act, 1937.

Analysis: The exemption in item 3 was confined to goods on which duty was levied or leviable under the Madras Prohibition Act, 1937, as that Act stood when the Sales Tax Act came into force. By the time the Tamil Nadu General Sales Tax Act, 1959, was enacted, the levy under section 18-A of the Madras Prohibition Act had already been repealed and re-enacted under the Central Act of 1955. Section 8 of the General Clauses Act, 1897, did not permit the later Sales Tax Act to be read as if it referred to the earlier state levy in its pre-repeal form, and the omission to mention the Central Act showed that no corresponding exemption was provided. The later 1972 notification granting exemption was not applicable to the assessment years in question.

Conclusion: The assessees were not entitled to exemption under section 8 read with item 3 of the Third Schedule, and the sales tax assessments were correctly made.

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