Wheat bran sales tax exemption upheld despite later schedule entry and departmental clarification; tax demands quashed.

A Gazette-published Government Order was accepted as a valid exemption notification for wheat bran because the Karnataka Sales Tax Act required no special form, and publication satisfied section 8-A(1). The later corrigendum was read as continuing the same exemption policy, which remained operative until cancelled under section 8-A(3); no cancellation notification was issued. The Court held that assessing authorities and the Commissioner could not dispute the State Government's competence to grant the exemption, and that beneficial tax exemptions must be construed liberally. The Second Schedule entry and departmental clarification did not impliedly withdraw the exemption, so wheat bran remained exempt from sales tax from 19 October 1991 and the impugned levies were quashed.

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Issues: Whether wheat bran stood exempt from sales tax under the Karnataka Sales Tax Act, 1957 from 19 October 1991, and whether the subsequent amendment, entry in the Second Schedule, and departmental clarification could revive tax liability.

Analysis: The Government Order published in the official Gazette was treated as a valid notification under section 8-A(1) because the Act did not prescribe any special form for a notification and publication in the Gazette satisfied the statutory requirement. The later corrigendum was construed as intended to carry out the same exemption policy for wheat bran, and the Court held that the exemption notification remained operative until cancelled under section 8-A(3). No subsequent cancellation notification was issued. The Court further held that the assessing authorities and Commissioner could not challenge the State Government's competence to issue the exemption, and that a beneficial tax exemption must be construed liberally. The Court also rejected the argument that the entry in the Second Schedule or departmental clarification impliedly withdrew the exemption.

Conclusion: Wheat bran was held exempt from tax with effect from 19 October 1991, and the impugned assessments and notices levying tax on that commodity were quashed.

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