Purchase tax exemption for soft wood used in block board manufacture affirmed by later notifications and retrospective clarification.

Soft wood used in manufacturing block board and block board frames was held to fall within the purchase tax exemption, because the original exemption scheme covered soft wood used for specified products and the later State notifications expressly extended that benefit to these goods. A prior departmental clarification was treated as non-binding, but the subsequent notifications, including one with retrospective effect, confirmed the intended scope of the exemption and removed the basis for denial. The assessee was therefore entitled to exemption from purchase tax on the soft wood so used.

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Issues: Whether the assessee was entitled to exemption from purchase tax on soft wood used in the manufacture of block board and block board frames under the exemption notifications, and whether the later government notifications supported that entitlement.

Analysis: The exemption under the original notification issued under section 10 of the Act was intended for soft wood used in the manufacture of specified products. The Tribunal had declined to rely on the Under Secretary's clarification on the footing that it was not a notification under section 10 and was not binding. However, the later notifications issued by the State Government expressly extended the exemption to soft wood used in block board and block board frames, and one of them was given retrospective effect. These notifications clarified the legislative intent and removed the basis for denying exemption to the assessee.

Conclusion: The assessee was entitled to the exemption from purchase tax on the soft wood used in the manufacture of block board and block board frames.

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