Full sales tax exemption excludes sales from turnover-tax levy where no actual tax is levied under the governing provision.

Sales fully exempt under rule 3(66a) are not sales on which tax is actually levied at a rate of two per centum or less for section 6B(2)(a) purposes. The expression "tax is levied" requires an actual positive levy, not a notional or nil levy, so fully exempt sales fall outside the excluded category. Those sales therefore remain deductible from gross turnover for turnover-tax computation, and the refusal to issue declaration forms on the footing that such sales were taxable at a concessional rate was unlawful.

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Issues: Whether sales fully exempt from sales tax under rule 3(66a) of the Bengal Sales Tax Rules, 1941 are covered by the expression "those on which tax is levied at a rate of two per centum or less" in section 6B(2)(a) of the Bengal Finance (Sales Tax) Act, 1941, so as to justify inclusion in turnover tax and refusal of declaration forms.

Analysis: The exemption under rule 3(66a) meant that no tax was actually levied on the sales in question. The expression used in section 6B(2)(a) is "tax is levied", which requires an actual positive levy and not a notional or nil levy. A sale on which no tax is levied cannot be treated as a sale on which tax is levied at a rate of two per centum or less. Sales enjoying full exemption therefore fall outside the excluded category and remain deductible from gross turnover for turnover-tax purposes.

Conclusion: Sales exempt under rule 3(66a) are not included within the words "those on which tax is levied at a rate of two per centum or less" in section 6B(2)(a). The applicants were not liable to pay turnover tax on such sales, and the refusal to issue declaration forms on that basis was unlawful.

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