Wheat purchase exemption limited by notification, while interest applied only after the exemption claim lost bona fide basis.

Exemption on wheat purchases for a roller flour mill was confined by the governing notification under section 4B and could not be enlarged by the recognition certificate alone. Purchases from sources other than the Food Corporation of India were therefore not covered by the exemption, and the broader claim for the period before 4 June 1986 was rejected. On interest, liability under section 8(1) did not arise for the pre-amendment period because the exemption claim was bona fide, but interest was payable on assessed tax for the period after 4 June 1986, when no bona fide basis remained for continuing the exemption claim.

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Issues: (i) Whether exemption on wheat purchases was available to a roller flour mill holding a recognition certificate for purchases made from sources other than the Food Corporation of India before the amendment dated 4 June 1986. (ii) Whether interest under section 8(1) could be levied on the assessed tax for the period before and after the amendment to the recognition certificate.

Issue (i): Whether exemption on wheat purchases was available to a roller flour mill holding a recognition certificate for purchases made from sources other than the Food Corporation of India before the amendment dated 4 June 1986.

Analysis: The exemption was traceable to the notification issued under section 4B, not to the recognition certificate by itself. The relevant notification granted exemption only for wheat purchased from the Food Corporation of India. The recognition certificate had to be read subject to the notification and could not enlarge the scope of exemption beyond what the notification permitted. The later amendment to the certificate did not alter the position because the exemption was already confined by the notification.

Conclusion: The exemption was not available for wheat purchases made from persons other than the Food Corporation of India, even for the period before 4 June 1986; the finding of exemption was erroneous and was set aside.

Issue (ii): Whether interest under section 8(1) could be levied on the assessed tax for the period before and after the amendment to the recognition certificate.

Analysis: For the period before 4 June 1986, the dealer's claim of exemption was held to be based on a bona fide understanding of the position, so the assessed tax for that period could not be treated as admitted tax for interest purposes. After the amendment, however, there was no bona fide basis to continue claiming exemption, and the assessed tax for the later period attracted interest under section 8(1).

Conclusion: Interest was not leviable on the tax assessed up to 4 June 1986, but it was leviable on the tax assessed for the period after 4 June 1986.

Final Conclusion: The revisional court interfered with the Tribunal's view on exemption, while granting limited relief on interest only for the pre-amendment period.

Ratio Decidendi: Exemption under a recognition certificate cannot extend beyond the scope of the governing notification, and interest liability depends on whether the tax was bona fide disputed or had become payable without such bona fide basis.

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