Retrospective exemption notifications can clarify earlier relief where both notifications show intent to cover woolen carpet yarn.

Woolen carpet yarn was held to fall within the exemption scheme under the Rajasthan Sales Tax Act, 1994 because the 13 June 1994 notification exempted raw wool used in woolen yarn manufacture, and the later 20 March 1997 notification expressly covered raw wool used in woolen carpet yarn manufacture with retrospective effect from 15 June 1994. Read together and construed in common parlance, the notifications were treated as reflecting a legislative intent to include woolen carpet yarn within the exempted category. The exemption and consequential set-off were therefore upheld, and the revision petitions failed.

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Issues: Whether woolen carpet yarn was covered by the exemption notifications dated 13 June 1994 and 20 March 1997 so as to entitle the assessee to tax exemption and set-off.

Analysis: Section 15 of the Rajasthan Sales Tax Act, 1994 empowered the State Government to exempt, fully or partially, sale or purchase of goods by notification, including retrospectively. The earlier notification of 13 June 1994 exempted raw wool used as raw material in the manufacture of woolen yarn within Rajasthan, while the later notification of 20 March 1997 expressly covered raw wool used as raw material in the manufacture of woolen carpet yarn and was made effective from 15 June 1994. Reading both notifications together, and applying the expression in common parlance, woolen carpet yarn was treated as falling within the exempted category and the later notification clarified the scope of the earlier one.

Conclusion: The question was answered in favour of the assessee and against the Revenue; the exemption and consequent set-off were upheld.

Final Conclusion: The revision petitions failed, and the orders of the Tax Board were left undisturbed.

Ratio Decidendi: A later retrospective exemption notification may be read as clarifying an earlier exemption where both notifications, construed together, show the legislative intent to include the disputed commodity within the exempted class.

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