Exemption notification prevails over taxing notification, and earlier assessment findings do not bind later years.

Where a commodity falls within both a taxing notification and an exemption notification, the exemption notification prevails as the more beneficial provision, so tax liability must be tested with reference to the exemption under Section 4 and the item is treated as non-taxable on that footing. A finding recorded for one assessment year does not operate as res judicata in a later year because each assessment year is a separate unit, and the commodity's classification and taxability may be examined afresh. The revision was allowed and the Tribunal's order was set aside.

---

---

Issues: (i) where an item is covered by two notifications, one exempting it from tax and the other levying tax, which notification applies; (ii) whether a finding recorded for an earlier assessment year operates as res judicata in a subsequent year.

Issue (i): Where the same commodity falls within both a taxing notification and an exemption notification, the legal position favours application of the exemption notification, being the more beneficial one. Liability to tax must be tested with reference to Section 4 where that provision grants exemption, notwithstanding another notification covering the item for tax.

Conclusion: The exemption notification applies, and the assessee is entitled to exemption/non-taxability on that footing.

Issue (ii): Each assessment year is a separate unit. A finding given in an earlier assessment year does not bind the parties in a later year as res judicata, and it does not prevent the assessing authority from examining the commodity's classification and taxability afresh.

Conclusion: The earlier year's finding did not operate as res judicata against the assessee or the revenue in the subsequent year.

Final Conclusion: The revision was allowed, the Tribunal's order was set aside, and the matter was left for further order by the Tribunal in accordance with the legal principles stated.

Ratio Decidendi: When two notifications apply to the same item, the exemption notification prevails over the taxing notification, and assessment findings for one year do not operate as res judicata in later years.

---