Tax incentive scheme cannot override earlier exemption conditions; purchase tax and interest remain leviable on raw material purchases.

The 1976 exemption notification could not be combined with the 1987 incentive scheme to avoid purchase tax on whole pulses used as raw material. The exemption notification remained subject to its condition that tax be paid at the full rate on separated pulses, while the later scheme preserved only concessional benefits under the Rajasthan Sales Tax Act, 1954 and did not create a full exemption from those conditions. The assessee therefore remained liable to purchase tax on the purchase turnover under section 5C, and the consequential interest on the additional demand was also upheld.

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Issues: Whether the assessee could simultaneously claim the benefit of the 1976 exemption notification and the 1987 incentive scheme so as to avoid purchase tax on whole pulses purchased as raw material, and whether the levy of interest on the resulting additional demand was sustainable.

Analysis: The exemption under the 1976 notification was conditional upon tax being paid at the full rate on the separated pulses manufactured out of the whole pulses. The 1987 incentive scheme, by its explanation, preserved only the concessional benefits available under section 5C and allied provisions of the Rajasthan Sales Tax Act, 1954, and did not enlarge those concessions into a complete exemption from the statutory conditions attached to the earlier notification. The Court held that the incentive scheme granted only a deferment or adjustment of tax liability up to the prescribed quantum limit, not an exemption from tax in a manner that would enable the assessee to satisfy the conditions of the 1976 notification. The two benefits could not be combined to avoid purchase tax, and the assessee remained liable to tax on the purchase turnover under section 5C. Interest on the quantified additional demand was also upheld.

Conclusion: The assessee was not entitled to combine the two notifications to escape purchase tax, and the levy under section 5C together with interest under section 11B(1)(f) was upheld against the assessee.

Final Conclusion: The revision was rejected, and the tax and interest demand sustained by the authorities remained undisturbed.

Ratio Decidendi: A tax incentive scheme preserving existing concessional provisions cannot be used to defeat the conditions of an earlier exemption notification, and where the statutory conditions for exemption are not satisfied, purchase tax and consequential interest remain leviable.

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