Conditional exemption for fabric sales fails where additional duty was neither leviable nor paid, leaving sales taxable.

An exemption notification for specified fabrics applied only where the relevant additional duty was leviable and, for the covered goods, proof of payment was shown. The later notification did not replace that condition for unprocessed tyre cord fabrics or warp sheets; it merely relaxed the proviso for other goods. Because the goods were described by the assessee as unprocessed tyre cord fabric or warp sheets and no additional excise duty was leviable or paid, the claimed exemption was unavailable and the sales remained taxable. On interest, the assessing authority was left free to proceed in accordance with law under section 11B.

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Issues: Whether sales of unprocessed tyre cord fabrics or warp sheets were exempt from tax under the Rajasthan Sales Tax Act, 1954 under the notification dated 5 March 1973, and whether the assessing authority could proceed to levy interest under section 11B of the Rajasthan Sales Tax Act, 1954.

Analysis: The exemption notification of 5 March 1973 granted exemption to specified fabrics but made the exemption in respect of unprocessed rayon and artificial silk fabrics conditional on additional duty being leviable and proof of payment of that duty. The later notification of 28 May 1982 did not supersede the earlier notification for tyre cord fabrics or warp sheets; it merely relaxed the proviso for other goods. On the facts, the assessee itself described the goods as unprocessed tyre cord fabric or warp sheets, and no additional excise duty was leviable or paid. The Tribunal therefore held that the assessee could not claim the unconditional exemption. As regards interest, the assessment order had only raised the issue and left it to be determined separately. In view of the applicable law under section 11B and the findings on taxability, the Tribunal declined to restrain the assessing authority from proceeding in accordance with law.

Conclusion: The sales were taxable under the Rajasthan Sales Tax Act, 1954, and the assessee was not entitled to the claimed exemption.

Final Conclusion: The writ petition failed on the principal question of exemption and was dismissed, leaving the assessing authority free to determine the issue of interest in accordance with law.

Ratio Decidendi: Where an exemption notification makes tax exemption conditional upon levy and payment of additional duty, the dealer must satisfy those conditions to claim the exemption; failing that, the sales remain taxable.

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