Industrial promotion exemption ceilings must reflect actual concessional tax incidence, not inflated rates on unrelated goods.

Industrial promotion scheme exemption ceilings must be computed with reference to the actual sales tax incidence on the goods dealt in by the dealer, including any concessional rate already available under the taxing statute. Where the sales tax law contains no express prohibition on concurrent enjoyment of the concession and the industrial incentive, authorities cannot substitute higher rates applicable to other goods to reduce the exemption benefit. A harmonious reading of the scheme requires that similarly placed units not be treated differently merely because of the incentive option exercised. The exemption ceiling therefore had to be recalculated on the basis of the concessional rates applicable to the assessee's transactions.

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Issues: Whether, for computing the ceiling of sales tax exemption under the industrial promotion scheme, the tax authorities could ignore the concessional rate applicable to the goods actually purchased and sold by the dealer and instead apply higher rates applicable to other goods, thereby reducing the exemption benefit.

Analysis: The entitlement to exemption under the industrial policy had to be read along with the concessions already available under the sales tax law. The available incentive was intended to operate over and above the statutory concessions, and there was no clear provision in the sales tax law restricting a dealer from availing a concessional rate while enjoying the exemption benefit. A construction that treated similarly placed units differently depending on the option exercised for incentive would create an unjustified dichotomy and would be inconsistent with a fair and harmonious reading of the scheme. In the absence of an express prohibition, the ceiling had to be worked out on the basis of the actual tax incidence applicable to the goods dealt in by the assessee.

Conclusion: The authorities were not justified in applying higher tax rates for the purpose of computing the exemption ceiling. The assessee was entitled to have the tax liability recomputed on the basis of the concessional rates applicable under the sales tax law.

Ratio Decidendi: Where an exemption incentive is granted under an industrial policy, and the statute does not expressly prohibit concurrent availment of a concessional rate available under the taxing statute, the incentive ceiling must be computed on the basis of the actual statutory tax incidence applicable to the dealer's goods, without creating artificial discrimination between eligible assessees.

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