Statutory exemption for exclusive dealing cannot be denied on one recovered slip without proof of taxable business activity.

Exemption under section 17 of the Tamil Nadu General Sales Tax Act, 1959, remained available where the assessee owning country oil chekkus was shown to be dealing exclusively in chekku products. A solitary recovered slip, even if treated as evidencing a sale of groundnut kernel, was insufficient to prove that the assessee was carrying on business in taxable goods or that the alleged sale occurred in the course of that business. In the absence of such proof, the revisional authority had no basis to disturb the appellate order and restore the assessment and penalty, and the revisional order was unsustainable.

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Issues: Whether the assessee was disentitled to exemption under section 17 of the Tamil Nadu General Sales Tax Act, 1959, on the basis of a solitary recovered slip said to evidence a sale of groundnut kernel, and whether the revisional order restoring the assessment and penalty was sustainable.

Analysis: The exemption was available to a person owning country oil chekkus only so long as he was dealing exclusively in the products of such chekkus. A single recovered slip, even if assumed to evidence a sale, did not by itself establish that the assessee was carrying on business in groundnut kernel. There was no evidence that the alleged sale was effected in the course of the assessee's business in taxable goods. In the absence of such proof, the revisional authority was not justified in interfering with the appellate order and restoring the assessment.

Conclusion: The exemption under section 17 could not be withdrawn on the facts proved, and the revisional order was unsustainable; the assessee succeeded.

Final Conclusion: The assessment and penalty restored by the revisional authority were set aside, and the assessee obtained relief.

Ratio Decidendi: A solitary alleged sale, without evidence that it was part of the assessee's business in taxable goods, is insufficient to deny a statutory exemption conditioned on exclusive dealing.

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