General sales tax exemption for new industrial unit goods attracted Central Sales Tax Act relief and nil tax treatment.

A State sales tax exemption for goods produced in a new industrial unit for a fixed period was treated as an exemption from tax generally, because it applied to the goods themselves and was not limited to specified transactions, stages of levy, or special circumstances. On that basis, the exemption fell within the Explanation to section 8(2-A) of the Central Sales Tax Act, 1956. The practical effect was that the dealer was entitled to nil tax under the Central Act for the relevant period.

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Issues: Whether the sales tax exemption granted under section 3B of the Assam Finance (Sales Tax) Act, 1956, for goods produced in a new industrial unit for a specified period constituted an exemption from tax generally so as to attract section 8(2-A) of the Central Sales Tax Act, 1956.

Analysis: The exemption was granted to goods produced by a dealer in a new industrial unit for five years from the commencement of production. The exemption was not confined to a special class of transactions or to a levy at specified stages, nor was it dependent on any special circumstance in the sense contemplated by the Explanation to section 8(2-A). As the notification and the State provision made the goods themselves exempt during the relevant period, the exemption was of a general character for those goods and not an exemption only in specified circumstances or under specified conditions.

Conclusion: The exemption under the State law attracted section 8(2-A) of the Central Sales Tax Act, 1956, and the dealer was entitled to nil tax under the Central Act.

Ratio Decidendi: Where a State sales tax exemption fully exempts specified goods produced by a dealer during the relevant period, without limiting the exemption to specified circumstances or conditions, the exemption is one from tax generally and the benefit of section 8(2-A) of the Central Sales Tax Act, 1956 follows.

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