Temporary sales tax exemption ends on statutory amendment; later exemption and cancellation remain valid under the Act.

A temporary sales tax exemption on wheat and wheat products ceased once the Act was amended to insert the relevant entry in the Fifth Schedule, because the notification was intended only as an interim measure until statutory amendment took effect. The later retrospective corrigendum did not revive the earlier notification; it operated only through the separate corrigendum mechanism. A fresh exemption notification issued under section 8-A(1) and cancelled under section 8-A(3) was also held valid, because section 8-A(2A) regulates transposition or alteration of levy and does not bar cancellation and re-issuance of exemptions. The writ petitions challenging the exemption notifications were dismissed.

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Issues: (i) Whether the notification dated 19 October 1991 granting a temporary abolition of sales tax on wheat and wheat products continued to operate after the later amendment inserting wheat bran into the Fifth Schedule; (ii) whether the State Government could validly cancel the exemption and thereafter issue a fresh exemption notification with effect from 1 April 1996 without violating section 8-A(2A) of the Karnataka Sales Tax Act, 1957.

Issue (i): Whether the notification dated 19 October 1991 granting a temporary abolition of sales tax on wheat and wheat products continued to operate after the later amendment inserting wheat bran into the Fifth Schedule.

Analysis: The notification was treated as a stop-gap measure intended to remain in force only until suitable amendment to the Act was made. The subsequent statutory amendment inserting the relevant entry in the Fifth Schedule brought the temporary arrangement to an end by its own terms. The later corrigendum giving retrospective effect to the inclusion of wheat bran did not revive the earlier temporary notification; it only operated to extend exemption retrospectively under the separate corrigendum mechanism.

Conclusion: The temporary notification did not survive after the amendment, and the issue was answered against the petitioners.

Issue (ii): Whether the State Government could validly cancel the exemption and thereafter issue a fresh exemption notification with effect from 1 April 1996 without violating section 8-A(2A) of the Karnataka Sales Tax Act, 1957.

Analysis: The exemption granted by the later notification was an independent exercise of power under section 8-A(1), and its cancellation was made under section 8-A(3). Section 8-A(2A) was understood as regulating transposition or alteration of levy so that tax is not imposed at two points, and not as disabling the Government from cancelling one exemption notification and issuing another under the statute. Since the entry in the Second Schedule continued to exist, the levy revived once the exemption was cancelled.

Conclusion: The fresh exemption and its cancellation were within statutory power, and there was no violation of section 8-A(2A).

Final Conclusion: The challenge to the tax exemption notifications failed, and the writ petitions were dismissed.

Ratio Decidendi: A temporary exemption notification that is expressly limited to operation until statutory amendment ceases on such amendment, and a later exemption notification issued under the statute may be separately cancelled under the cancellation power without offending the provision governing transposition or alteration of levy.

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