Mineral water exemption under sales tax law sustained where plain purified water was neither aerated nor distilled water.

Mineral water was treated as exempt under the Rajasthan Sales Tax Act, 1954 because the product was shown to be plain water after simple purification, with no gas added, and therefore neither aerated water nor distilled water. The relevant schedule entry covered water but excluded only distilled or aerated waters, so the exclusion did not apply on the record before the Tribunal. A later notification that separately mentioned mineral water and aerated water reinforced their distinct treatment. On that basis, mineral water was held not taxable up to 30 September 1995, and the notice and assessment order levying tax were quashed.

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Issues: Whether mineral water was taxable under the Rajasthan Sales Tax Act, 1954 as aerated water or distilled water, and whether the show cause notice and assessment order levying tax could be sustained.

Analysis: The relevant schedule entry covered water but excluded distilled or aerated waters, and the exemption under section 4(1) of the Rajasthan Sales Tax Act, 1954 was therefore unavailable only if mineral water answered either description. The record showed that the product underwent a simple purification process, no gas was added, and the material before the Tribunal indicated that mineral water remained ordinary water and was neither distilled nor aerated. The subsequent notification under section 15 of the Rajasthan Sales Tax Act, 1994 separately mentioned mineral water and aerated water, reinforcing that the two were distinct and that mineral water had not been shown to fall within the taxable exclusion prior to 1 October 1995.

Conclusion: Mineral water was not taxable till 30 September 1995, and the notice and assessment order levying tax were quashed in favour of the assessee.

Ratio Decidendi: Where mineral water is shown to be plain water, without gas content, it does not fall within the exclusion for aerated or distilled water and remains exempt from tax under the applicable entry.

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