Annual export-linked exemption requires year-wise compliance; cumulative satisfaction by the end of the period was rejected.

An export-oriented unit claiming exemption under the Punjab General Sales Tax (Deferment and Exemption) Rules, 1991 had to satisfy the export-linked eligibility condition in each relevant year. The annual assessment structure did not permit continuation of exemption merely because the prescribed export percentage might be achieved cumulatively by the end of the ten-year deferment period. In the absence of an express rule allowing such carry-forward treatment, exemption could not be retained for years in which the export target was missed. The assessee was therefore not entitled to exemption for those years, and no substantial question of law arose.

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Issues: Whether an export-oriented unit granted exemption for a ten-year deferment period could continue to claim tax exemption in years when it failed to achieve the prescribed export target, on the footing that the target could be satisfied only on a cumulative basis at the end of the period.

Analysis: The exemption scheme under the Punjab General Sales Tax (Deferment and Exemption) Rules, 1991 required the unit to satisfy the export-linked eligibility condition during the relevant year. The Rules contemplated annual assessment, and no provision was shown authorising continuation of exemption despite failure to achieve the prescribed export percentage in a particular year. In the absence of an express enabling provision, the claim that exemption should continue until the end of the ten-year period and that tax would become payable only if the cumulative target was not met was not sustainable.

Conclusion: The assessee was not entitled to tax exemption in years in which the export target was not achieved, and no substantial question of law arose.

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