General State sales tax exemption excludes Central sales tax where the exemption is truly unconditional and general.

A general exemption under the Andhra Pradesh General Sales Tax Act, granted by G.O. Ms. No. 604, was treated as a corresponding State exemption for section 8(2-A) of the Central Sales Tax Act, 1956. Because the State notification operated as a general exemption and was not limited to specific conditions, the same inter-State turnovers could not be subjected to Central sales tax. The earlier binding interpretation of the State exemption was applied, and the contrary conditional-character argument was rejected. The disputed turnovers were therefore excluded from tax under the Central Act, with consequential refund or adjustment relief indicated.

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Issues: Whether goods exempt from tax generally under the Andhra Pradesh General Sales Tax Act, 1957 by virtue of Government Order Ms. No. 604 were also entitled to nil tax treatment under section 8(2-A) of the Central Sales Tax Act, 1956.

Analysis: Section 8(2-A) of the Central Sales Tax Act, 1956 denies Central sales tax only where the corresponding State law grants a general exemption or a generally lower rate of tax. The exemption under G.O. Ms. No. 604, as earlier interpreted by the Division Bench, was a general exemption and not one confined to specified circumstances or conditions. The disputed turnovers had already been exempted under the State sales tax law, and the contrary view that the exemption was conditional had been rejected in the earlier binding decision. The later reversal in Pine Chemicals did not affect the present controversy because the issue here was the character of the State exemption, not identification of exempt goods as between dealer and goods.

Conclusion: The turnovers were entitled to exemption under section 8(2-A) of the Central Sales Tax Act, 1956 and could not be brought to tax under that Act.

Final Conclusion: The revisional challenge succeeded, the levy on the disputed inter-State turnovers was set aside, and the amounts were directed to be excluded from tax with consequential refund or adjustment relief.

Ratio Decidendi: Where the corresponding State notification grants a general exemption from sales tax, the same turnover cannot be subjected to Central sales tax under section 8(2-A) of the Central Sales Tax Act, 1956.

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