Statutory liability survives tax exemption, so renewal of an eligibility certificate cannot be refused on that ground.

Statutory liability under the charging provision is distinct from the actual payability of tax after exemption or inclusion of goods in the tax-free schedule. A dealer may remain liable under the Act and Rules even where no tax is ultimately payable, so the mere fact that goods are tax-free does not defeat renewal of an eligibility certificate. The revisional view that absence of immediate tax liability extinguished statutory liability was incorrect. The objection to renewal therefore failed, the cancellation order was unsustainable, and the renewal application was required to be decided afresh in accordance with law.

---

---

Issues: Whether the dealer could be denied renewal of an eligibility certificate on the ground that the goods dealt in were tax-free and that there was no liability to pay tax under the sales tax law.

Analysis: The scheme of the Act and the Rules was examined to distinguish between statutory liability to be governed by the charging provision and the actual incidence of tax after exemptions. A person may be liable under the charging section even though, because of exemption or inclusion of goods in the tax-free schedule, no tax is ultimately payable. The reasoning that no eligibility certificate could exist merely because the goods were tax-free was therefore unsustainable. The order of revision proceeded on an erroneous understanding that absence of immediate tax liability destroyed the dealer's statutory liability altogether.

Conclusion: The objection to renewal of the eligibility certificate failed and the revisional order cancelling the certificate was not sustainable.

Final Conclusion: The dealer succeeded and the impugned cancellation was set aside, leaving the renewal application to be decided afresh in accordance with law.

Ratio Decidendi: Statutory liability under the charging provision is distinct from the actual payability of tax after exemptions, and exemption from tax does not by itself negate the dealer's liability for the purposes of the Act and the Rules.

---