State sales tax exemption limited to local liability does not extend to inter-State sales under section 8(2-A).

An exemption confined to specified footwear under the Rajasthan Sales Tax Act, 1954 was held not to be an exemption from tax generally for purposes of section 8(2-A) of the Central Sales Tax Act, 1956. The Tribunal applied its earlier ruling on the same point and reasoned that a State-law exemption limited to local sales tax liability does not automatically extend to inter-State sales. On that basis, the claimed benefit was denied for inter-State transactions, and the Revenue's position was accepted.

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Issues: Whether an exemption granted under the Rajasthan Sales Tax Act, 1954 for specified footwear from sales tax could be treated as an exemption from tax generally so as to attract exemption for inter-State sales under section 8(2-A) of the Central Sales Tax Act, 1956.

Analysis: The Tribunal followed its earlier decision on the same legal question and applied the principle that an exemption confined to liability under the State sales tax law does not, by that fact alone, amount to a general exemption from tax for the purposes of section 8(2-A) of the Central Sales Tax Act, 1956. The relevant exemption was only under the State enactment and was limited in its scope and conditions.

Conclusion: The exemption under the Rajasthan Sales Tax Act, 1954 did not exempt the inter-State sales of the goods from tax under section 8(2-A) of the Central Sales Tax Act, 1956, and the revision was allowed in favour of the Revenue.

Final Conclusion: The Tribunal rejected the claim that the State exemption extended to inter-State sales and set aside the Board's contrary view.

Ratio Decidendi: A State tax exemption limited to liability under the local sales tax law is not an exemption from tax generally for the purpose of section 8(2-A) of the Central Sales Tax Act, 1956.

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