K. Vinod Chandran, CJ. – The assessment years with which the appeals are concerned are 2001-02, 2002-03, 2003-04 and 2004-05.

2. The following questions of law were framed for consideration in the appeal: –

(1) Whether the provision granting exemption has to be interpreted keeping in mind the objective and the legislative intent behind the said exemption and not by adopting the literal meaning?

(2) Whether it was permissible for the Tribunal to deviate from the view taken in the previous years and deny exemption in absence of any material change in the facts and circumstances of the appellant's case and act contrary to the law settled by the Hon'ble Supreme Court in the case reported in 193 ITR 321 (SC) followed by the Delhi High Court in 264 ITR 276 (Del)?

3. The aforesaid questions arise in the context of the exemption granted by the State Government under Section 7 of the Bihar Finance Act, 1981(for brevity ‘the Act of 1981’). Sub-section (3) of the Section 7 empowers the State Government by notification and subject to such conditions or restrictions as it may impose, to exempt sale or purchase of any goods or class of description of goods or dealers from payment of tax. The State