Tax exemption does not exclude registered dealers from concessional purchase benefits for packing materials and containers.

A dealer whose goods were exempt under Schedule I to the Bengal Finance (Sales Tax) Act, 1941 could still be registered under the Act and retain the statutory incidents of registration. Goods exempt under section 6(1) were not outside the Act altogether; exemption affected taxable turnover, not the dealer's inclusion within the statutory scheme. On that basis, the dealer remained entitled to purchase packing materials and containers at the concessional rate of tax and to obtain the necessary declaration forms. The distinction between tax exemption and complete non-liability supported that result, and the writ relief sought was granted.

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Issues: Whether a dealer whose goods are exempt from sales tax under Schedule I to the Bengal Finance (Sales Tax) Act, 1941 is entitled, as a registered dealer, to purchase packing materials and containers at a concessional rate of tax and to obtain declaration forms for that purpose.

Analysis: The statutory scheme distinguished between goods declared tax-free and the dealer's status under the Act. Goods in Schedule I were exempt from levy under section 6(1), but they were not taken outside the Act altogether. Sales of such goods could still enter the dealer's gross turnover, and exemption operated at the stage of arriving at taxable turnover. The Act also expressly permitted registration of a dealer even where he dealt exclusively in Schedule I goods, and the explanation to section 8(1) would be rendered ineffective if such dealers were denied the statutory incidents attached to registration. The distinction between exemption from taxation and complete non-liability to tax supported the view that the dealer remained within the framework of the Act for relevant purposes, including entitlement to the concessional purchase facility for packing materials used in the business.

Conclusion: The dealer was entitled to the concessional rate of tax on packing materials and containers and the writ relief sought had to be granted.

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