Strict proof for defence-sale exemption under the sales tax entry was required, and private sales could not qualify without statutory compliance.

Exemption under Entry 29-B required strict proof that sales were made to Defence Service installations inside the State for resale to military installations and personnel. The dealer discharged that burden only for part of the turnover, so exemption was allowed to that extent; for the balance, sales were shown to have been made to private individuals without proof of the statutory defence-sale condition. A permit endorsement or label stating that goods were for defence personnel only was insufficient where the actual sales did not satisfy the entry. The tax authorities' rejection of the remaining claim was upheld.

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Issues: Whether the assessee was entitled to exemption from sales tax under Entry 29-B of List-A of the Rate Chart appended to the Orissa Sales Tax Act, 1947 in respect of sales claimed to have been made for defence organisations.

Analysis: Entry 29-B exempted sale of goods to Defence Service installations located inside the State for resale to military installations and personnel. The burden lay on the dealer to establish that the sales satisfied that statutory requirement. The assessee produced proof for part of the claimed turnover, and exemption was allowed to that extent. For the balance, the materials showed sales to three individuals without proof that the goods were sold to Defence Service installations or that the statutory condition for resale to military personnel was met. A mere permit endorsement or label stating that the goods were for sale to defence personnel only was insufficient to satisfy the entry when the actual sales were made to individuals.

Conclusion: The assessee was not entitled to exemption for the disallowed turnover, and the finding of the tax authorities rejecting that claim was upheld.

Final Conclusion: The revision failed because the statutory condition for defence-related exemption was not proved for the disputed sales, and the tax demand, as modified by the appellate authority, remained undisturbed.

Ratio Decidendi: A dealer claiming exemption under a specific taxing entry must strictly prove that the sales fall within the exact statutory description, and sales to private individuals cannot be treated as sales to defence service installations merely on the basis of an intended onward sale.

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