Central sales tax exemption for goods already taxed under State law upheld as a valid anti-double-taxation notification.

Section 8(5) of the Central Sales Tax Act, 1956 validly empowers a State Government to exempt specified goods from Central sales tax where State tax has already been levied and collected, because the notification operates to prevent a second levy rather than to provide a refund after double taxation. That construction is consistent with section 15(b), which addresses refund in cases where double taxation has already occurred, and does not conflict with the exemption mechanism. The earlier contrary view was rejected, the notification was treated as intra vires and enforceable, and the assessments based on it could not stand, subject to verification of compliance with the notification conditions.

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Issues: Whether the notification issued under section 8(5) of the Central Sales Tax Act, 1956, exempting declared goods from Central sales tax when State tax had already been levied and collected, was intra vires and enforceable, and whether the earlier decisions holding it bad were correct.

Analysis: Section 6 of the Central Sales Tax Act, 1956 is subject to the other provisions of the Act, including section 8(5), which authorises the State Government to direct, by notification, that no tax under the Central Act shall be payable in respect of specified goods subject to specified conditions. The notification in question was designed to prevent a second levy under the Central Act where declared goods had already suffered tax under the State Act. That field is distinct from section 15(b), which deals with refund of State tax after double taxation has in fact occurred. The notification does not conflict with section 15(b); it operates to avoid the second assessment altogether. The earlier Division Bench rulings failed to maintain this distinction.

Conclusion: The notification was valid, intra vires, and enforceable, and the earlier contrary decisions were overruled.

Final Conclusion: The impugned assessments could not stand and were quashed, with liberty to the assessing authority to verify compliance with the notification conditions.

Ratio Decidendi: A notification under section 8(5) of the Central Sales Tax Act, 1956 may validly exempt Central sales tax on specified goods already taxed under the State Act, because it operates to prevent a second levy and does not contradict the separate refund mechanism in section 15(b) of the Act.

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