Inter-State sales tax exemption under a state notification cannot be claimed after reorganisation where the policy resolution is unenforceable.

The exemption under S.O. No. 478, issued under the Bihar Finance Act, 1981, applied only to intra-State sales and did not extend to purchases that became inter-State sales after Jharkhand was created. Once the goods moved from Jharkhand to Bihar, the transactions fell within the Central Sales Tax Act, 1956, not the Bihar Finance Act. The 1995 policy resolution did not itself create an enforceable right to exemption for inter-State sales, and the operative source remained the statutory notification, not the policy resolution. No mandamus could therefore be issued to compel exemption on inter-State purchases.

---

---

Issues: Whether the petitioners were entitled to continue exemption from sales tax on purchase of raw material after the transaction became an inter-State sale on the creation of the State of Jharkhand, and whether the 1995 policy resolution could be treated as enforceable law binding on the State.

Analysis: The exemption granted under S.O. No. 478, issued under section 7(3)(b) of the Bihar Finance Act, 1981, was confined to intra-State sales. After the reorganisation of the State, purchases made in the territory of Jharkhand for movement to Bihar became inter-State sales, which fall within the Central Sales Tax Act, 1956 and not within the Bihar Finance Act, 1981. The 1995 policy resolution did not promise exemption for inter-State sales, and by itself was not enforceable as law. What became operative was the statutory notification issued under the Bihar Finance Act, not the earlier policy resolution.

Conclusion: The petitioners were not entitled to claim exemption for inter-State purchases, and no mandamus could issue to compel grant of such relief.

---