Single-point sales tax rules treat the first registered dealer's sale as the taxable point, even if that sale is exempt.

Under the Rajasthan Sales Tax Act, 1954 and Rule 15, tax in a single-point sales tax scheme is fixed at the first sale in the series by a registered dealer, and that point is not displaced merely because the first sale is exempt under section 4. The rule expressly preserves exemptions, but does not make taxability a condition for identifying the first point. Accordingly, an exempt first sale still exhausts the statutory first point in the chain, and the levy cannot be shifted to a later sale by another registered dealer unless the statute or rule expressly so provides. The administrative circular was treated as consistent with this construction.

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Issues: Whether, under the Rajasthan Sales Tax Act, 1954 and Rule 15 of the Rajasthan Sales Tax Rules, the first point of tax in a series of sales remains the sale by the first registered dealer even when that sale is exempt from tax, so that the subsequent sale by another registered dealer can be subjected to sales tax.

Analysis: Section 5 of the Rajasthan Sales Tax Act, 1954 fixes tax at a single point in the series of sales as prescribed by the Rules. Rule 15 provides that tax shall be at the first point in the series of sales and expressly states that nothing in the rule affects any exemption granted under section 4. The Explanation to Rule 15 defines the first point as the first sale in the series by a registered dealer, without making taxability a condition for that point. On this construction, an exempt sale by the first registered dealer still exhausts the first point in the chain, and the point of levy cannot be shifted to the next sale merely because the first sale was exempt. The earlier view that an exempt first sale does not count as the first point was therefore rejected as inconsistent with the plain language of the Act and the Rules. The administrative circular of the Commissioner was treated as supporting this construction as contemporanea expositio.

Conclusion: The first sale by the registered dealer remained the first point in the series of sales notwithstanding exemption, and the second registered dealer's sale was not liable to sales tax on that basis. The answer was in favour of the assessee.

Final Conclusion: The reference was answered by holding that exemption at the first registered dealer's stage does not shift the statutory first point of tax to the subsequent sale.

Ratio Decidendi: In a single-point sales tax scheme, the statutory first point in a series of sales is determined by the rule itself and is not displaced by the fact that the first registered dealer's sale is exempt from tax unless the statute or rule expressly provides for such shifting.

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