General exemption under sales tax law must be unconditional; conditional footwear relief did not bar Central sales tax or interest.

An exemption from State sales tax on footwear was held not to be a general exemption because it applied only subject to value limits and specified manufacturing or marketing conditions; inter-State sales therefore did not qualify for exemption under section 8(2-A) of the Central Sales Tax Act, 1956. Interest on the tax demand was treated as accruing by operation of law from the date tax became payable under the Rajasthan Sales Tax Act, 1954, and the later clarification of liability did not defer that statutory obligation. Time was nevertheless allowed to file form C declarations, enabling the concessional rate under section 8(1) and consequential recalculation.

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Issues: (i) Whether the exemption on footwear under the Rajasthan Sales Tax Act, 1954 was a general exemption so as to attract exemption from Central sales tax under section 8(2-A) of the Central Sales Tax Act, 1956; (ii) whether interest on the tax demand was leviable from the date the tax became payable under the Rajasthan Sales Tax Act, 1954; (iii) whether time could be granted to furnish declarations in form C to obtain the concessional rate under section 8(1) of the Central Sales Tax Act, 1956.

Issue (i): Whether the exemption on footwear under the Rajasthan Sales Tax Act, 1954 was a general exemption so as to attract exemption from Central sales tax under section 8(2-A) of the Central Sales Tax Act, 1956.

Analysis: Section 8(2-A) of the Central Sales Tax Act, 1956 applies only where the relevant goods are exempt from State sales tax generally. An exemption that is available only if the goods satisfy stated limits and conditions is not a general exemption. The exemption on footwear was limited by value and by the nature of the manufacturing or marketing unit, and therefore operated only in specified circumstances and under specified conditions.

Conclusion: The exemption was not a general exemption, and the inter-State sales of the footwear remained liable to Central sales tax. This issue was decided against the assessee.

Issue (ii): Whether interest on the tax demand was leviable from the date the tax became payable under the Rajasthan Sales Tax Act, 1954.

Analysis: The liability to pay interest under section 11B of the Rajasthan Sales Tax Act, 1954 arose by operation of law from the date the tax was required to be paid. The later judicial clarification of the legal position did not postpone the statutory liability. The relevant provision also contemplated interest where the liability was quantified on assessment under the Act.

Conclusion: Interest was rightly held leviable from the date the tax was payable under the Act. This issue was decided against the assessee.

Issue (iii): Whether time could be granted to furnish declarations in form C to obtain the concessional rate under section 8(1) of the Central Sales Tax Act, 1956.

Analysis: The assessee had not furnished the declarations earlier, but the first appellate authority had already allowed time to produce them. The final order maintained that relief and permitted the declarations to be filed within a further period, so that the concessional rate could be applied and interest recalculated accordingly.

Conclusion: Time was allowed to furnish form C declarations, and on compliance the concessional rate would apply. This issue was decided in favour of the assessee.

Final Conclusion: The exemption claim under the State law did not shield the inter-State sales from Central sales tax, the levy of interest from the statutory due date was upheld, and limited relief was granted only for filing form C declarations to enable reassessment at the concessional rate.

Ratio Decidendi: For the purpose of section 8(2-A) of the Central Sales Tax Act, 1956, an exemption under the State sales tax law is "general" only when the goods are wholly exempt as such, and not when the exemption depends on specified circumstances or conditions.

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