Goods-based sales tax exemption continues beyond first inter-State sale under the notification, not limited to the dealer.

The notification dated 4 September 1995 under Section 8(5) of the Central Sales Tax Act, 1956 was construed as granting exemption to the goods manufactured by an eligible industrial unit, not merely to the manufacturer-dealer or only the first inter-State sale. The proviso was treated as a qualification to the exemption rather than a restriction defeating the main benefit, and Rule 28A(4)(c) was read consistently with that interpretation by recognising exemption at subsequent stages of sale. The exemption was therefore held to attach to the goods, and the issue was resolved in favour of the assessee.

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Issues: Whether the notification dated 4 September 1995 issued under Section 8(5) of the Central Sales Tax Act, 1956 grants exemption qua the goods manufactured or qua the dealer selling them.

Analysis: The notification was construed as granting exemption to the goods manufactured by the eligible industrial unit and not limiting the benefit to the first inter-State sale by the manufacturer-dealer. The proviso was treated as a qualification to the exemption and not as a restriction that would defeat the main provision. Rule 28A(4)(c) was read as supporting the same understanding, since it contemplated exemption of subsequent sales and reinforced the legislative intent to preserve the tax benefit at later stages of sale.

Conclusion: The exemption under the notification is relatable to the goods and not to the dealer. The question was answered in favour of the assessee.

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