Item-specific tax exemption notifications lapse on amendment of the goods' tax rate under section 8-A(3-A).

A notification reducing tax on specified machine tools was item-specific and therefore fell within section 8-A(1)(a) of the Karnataka Sales Tax Act, not section 8-A(1)(b), which applies to a class of dealers. Because section 8-A(3-A) provides that a clause (a) notification is cancelled to the extent it relates to those goods when the Act amends the tax rate on them, the notification ceased to operate from 15 March 1980. The view that it survived under clause (b) was rejected.

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Issues: Whether the notification dated 23 April 1975 reducing tax on specified machine tools fell under section 8-A(1)(a) of the Karnataka Sales Tax Act, 1957, and consequently ceased to operate when the tax rate on those goods was amended with effect from 15 March 1980.

Analysis: Section 8-A(1)(a) empowers the State Government to grant exemption or reduction in tax in respect of specified goods, while section 8-A(1)(b) deals with a specified class of dealers. A notification issued in respect of identified goods, and not a class of dealers, is governed by clause (a). Under section 8-A(3-A), if the tax rate on goods covered by a clause (a) notification is modified by amendment to the Act, the notification stands cancelled to the extent it relates to those goods from the date the amendment comes into force. The notification in question was item-specific and therefore squarely fell within section 8-A(1)(a).

Conclusion: The notification automatically ceased to be effective from 15 March 1980 when the tax rate on the relevant goods was enhanced by amendment; the contention that it survived under section 8-A(1)(b) was rejected.

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