General sales tax exemption extends to inter-State sales where the State exemption is unconditional under section 8(2-A).

Certified and truthfully labelled seeds were held to enjoy a general exemption under the Andhra Pradesh General Sales Tax Act, 1957, so section 8(2-A) of the Central Sales Tax Act, 1956 made the inter-State sales tax liability nil. The explanation to section 8(2-A) excludes only exemptions granted in specified circumstances or under specified conditions, and the earlier finding that this notification was not merely conditional remained binding. The revenue's reliance on a later Supreme Court decision did not alter that position, and the inter-State turnovers could not be taxed.

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Issues: Whether the inter-State turnover of certified and truthfully labelled seeds, which was exempt from tax under the Andhra Pradesh General Sales Tax Act, 1957 by virtue of a general exemption, was also exempt from tax under section 8(2-A) of the Central Sales Tax Act, 1956.

Analysis: Section 8(2-A) of the Central Sales Tax Act, 1956 makes the CST liability nil where the sale or purchase of the goods is exempt from tax generally under the sales tax law of the appropriate State. The explanation excludes only exemptions granted in specified circumstances or under specified conditions. The exemption notification under the Andhra Pradesh General Sales Tax Act, 1957 covered all varieties of certified and truthfully labelled seeds for agricultural purposes and was treated as a general exemption. The contention that the exemption was conditional had already been rejected in earlier binding precedent, and the subsequent Supreme Court decision relied on by the revenue did not govern the present controversy.

Conclusion: The inter-State turnovers were exempt under section 8(2-A) of the Central Sales Tax Act, 1956 and could not be brought to tax.

Ratio Decidendi: Where goods are exempt from tax generally under the appropriate State sales tax law, the same exemption extends to inter-State sales under section 8(2-A) of the Central Sales Tax Act, 1956, and a conditionally exempt transaction alone is excluded by the explanation.

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