Central sales tax exemption continues until withdrawn under the Central Act; State notification changes do not ? cancel it.

A notification granting exemption on inter-State sales under section 8(5) of the Central Sales Tax Act, 1956 remains effective until withdrawn or modified under that Act itself. A change, withdrawal, or supersession of a separate State sales tax exemption notification does not automatically cancel a live Central exemption because the two operate in different legislative fields. On that footing, reassessment notices based on the assumption that the Central exemption had ceased were founded on a non-existent premise and lacked jurisdiction; the notices, reassessment orders, and demand notices were quashed.

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Issues: Whether reassessment notices issued under section 30 of the Rajasthan Sales Tax Act, 1994 read with section 9 of the Central Sales Tax Act, 1956 were without jurisdiction because they proceeded on the assumption that exemption under section 8(5) of the Central Sales Tax Act, 1956 had ceased on withdrawal or supersession of the State sales tax exemption notification.

Analysis: The exemption claimed by the dealer related to inter-State sales of processed cereals under a notification issued in exercise of power under section 8(5) of the Central Sales Tax Act, 1956. The State notification issued under the Rajasthan sales tax law and the Central notification operated in different legislative fields, because exemption from inter-State sales tax is referable to Parliament's domain and the State Government acts under delegated Central power only when issuing a notification under section 8(5) of the Central Sales Tax Act, 1956. Withdrawal or supersession of a notification under the State sales tax law did not automatically cancel or render inoperative a live notification issued under the Central Act. The reassessment notice was therefore founded on a non-existent factual premise. Since the goods involved were processed cereals covered by the Central notification, there was no basis to treat the turnover as escaped assessment merely because the State exemption scheme had changed.

Conclusion: The reassessment notices were without jurisdiction and the exemption under the Central notification continued to apply until withdrawn under the Central Act itself.

Final Conclusion: The challenge succeeded, and the notices, reassessment orders, and demand notices based on them were quashed.

Ratio Decidendi: A notification granting exemption under section 8(5) of the Central Sales Tax Act, 1956 can be withdrawn or modified only by authority acting under that provision, and a change in exemption under the State sales tax law does not by itself repeal or supersede the Central exemption.

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