Deeming cancellation of exemption notifications applies only within the statutory category covered by section 8-A(3A).

Section 8-A(3A) of the Karnataka Sales Tax Act applies only to exemption notifications issued under section 8-A(1)(a). The article explains that the exempting notification on purchase turnover in old gold and silver articles was not one issued under that provision, so the deeming cancellation mechanism could not operate on it. As a result, revisional notices premised on loss of exemption were unsustainable to that extent, and the challenge to taxation on the footing that the exemption had ceased could not be maintained.

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Issues: Whether the exemption notification issued under section 8-A of the Karnataka Sales Tax Act, 1957, exempting purchase turnover in old gold and silver articles, was a notification under section 8-A(1)(a) so as to attract section 8-A(3A) and justify the revisional notices.

Analysis: The revisional notices proceeded on the basis that the exemption granted by Notification No. S.O. 2048 dated 10th September, 1970 stood cancelled upon a modification in the rate of tax by virtue of section 8-A(3A). The revenue conceded, however, that the notification in question was not one issued under section 8-A(1)(a). Since section 8-A(3A) operated only upon notifications falling within section 8-A(1)(a), the deeming cancellation provision had no application to the exempting notification relied upon in the notices.

Conclusion: The notification was not cancelled under section 8-A(3A), and the impugned notices, insofar as they proceeded on the assumption that the exemption had ceased, were unsustainable. The petitions were allowed in part.

Final Conclusion: The challenged notices could not be sustained to the extent they sought to tax the purchase turnover in old gold and silver articles on the footing that the exemption had been lost.

Ratio Decidendi: A deeming provision cancelling exemption notifications applies only to notifications that squarely fall within the statutory category to which the deeming clause is confined.

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