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Issues: Whether, for the purpose of computing the exemption limit under entry 118 of the notification issued under section 49(2) of the Gujarat Sales Tax Act, 1969, sales made against forms 17-A and 19 were to be excluded from taxable turnover on the footing that they were deductible under section 7(iii) of the Act.
Analysis: The exemption scheme required the aggregate of tax which would have become leviable from the specified manufacturer but for entry 118 to be ascertained by applying the ordinary charging and deduction provisions of the parent Act. The language of the condition attached to entry 118 was held to be clear: the assessing authority had to determine the tax liability as if entry 118 did not exist, but without rewriting the statutory computation machinery or implying an additional restriction not found in the notification. The Court applied the settled principles of strict construction in fiscal legislation and exemption provisions, holding that there is no room for intendment when the words used are unambiguous. It further held that sales to registered dealers covered by forms 17-A and 19 remained relevant in regular assessment under the Act, and the amounts could not be discarded merely because they were part of the exemption-computation exercise. The Court also rejected the contention that this construction rendered sub-entry (2) otiose.
Conclusion: The sales made against forms 17-A and 19 were not liable to be discarded, and the tax attributable to those transactions had to be taken into account in computing the exemption limit under entry 118. The question was answered in the negative, in favour of the assessee and against the Revenue.
Final Conclusion: The reference was answered by applying the parent Act's ordinary assessment provisions to measure the exemption already availed under the incentive notification, without reading into the scheme any exclusion not expressly provided.
Ratio Decidendi: In computing the exhaustion of an exemption limit under a fiscal incentive notification, the tax that would otherwise be leviable must be determined according to the parent taxing statute's ordinary provisions, and an exclusion will not be implied unless the notification expressly provides for it.
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