Sales tax exemption does not exempt imported raw material from separate entry tax under a distinct levy scheme.

Sales tax exemption on finished products under the Bihar Finance Act, 1981 did not extend to entry tax on coal imported from outside the State for use as raw material. Entry tax and sales tax were treated as distinct levies: sales tax arose on sale or purchase, while entry tax was attracted by entry of goods into a local area for consumption, use or sale. The sales tax exemption certificate did not create immunity from entry tax, and no separate notification under the Entry Tax Act exempted the assessee. The second proviso to section 3(2) was confined to adjustment of tax already paid, not automatic exemption. The writ petition therefore failed.

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Issues: Whether exemption from sales tax on finished products under the Bihar Finance Act, 1981 entitled the assessee to claim immunity from entry tax on coal imported from outside the State for use as raw material.

Analysis: The relevant charging provisions showed that sales tax under section 7(3) of the Bihar Finance Act, 1981 and entry tax under sections 3 and 6 of the Bihar Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1993 operate in distinct fields. Sales tax liability arises on sale or purchase, while entry tax is attracted by entry of goods into a local area for consumption, use or sale. The exemption certificate granted under the sales tax notification exempted the finished product from sales tax, but no notification under section 6 of the Entry Tax Act exempted the assessee from entry tax. The second proviso to section 3(2) of the Entry Tax Act was held to deal only with adjustment of tax already paid, not with a complete exemption from entry tax merely because sales tax exemption had been granted on finished goods. The decision in Associated Cement Companies Ltd. was distinguished as dealing with adjustment of entry tax against sales tax liability, not with automatic exemption from entry tax.

Conclusion: The assessee was not entitled to exemption from entry tax on coal brought from outside the State merely because it enjoyed sales tax exemption on its finished products.

Final Conclusion: The writ petition failed because sales tax exemption on the finished product did not extinguish the separate statutory liability to pay entry tax on imported raw material, and the claim for refund or exemption could not be granted on that basis.

Ratio Decidendi: Exemption from sales tax on finished goods does not, by itself, confer exemption from entry tax on raw materials, because entry tax and sales tax are distinct levies and exemption from entry tax must arise only from a specific notification under the Entry Tax Act.

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