The power of the State Government to grant exemption from payment of tax is almost unlimited, and the exemption from tax given under a notification issued in exercise of powers conferred under Section 15 of the Act means that those goods are exempted in accordance with the provisions of the Act.

Dr. Vineet Kothari, J.-Both these revision petitions are directed against the order of Tax Board dated 17.06.2003, whereby the Tax Board held setting aside the order of Additional Commissioner under Section 40 of the Rajasthan Sales Tax Act, 1994 (for short “the Act of 1994” hereinafter) that the words exempted goods as given in Section 13-A(2) of the Act of 1994, which excludes the turnover of exempted goods from the turnover liable to turnover tax levied under Section 13-A of the Act.

Section 13-A(2)(i) of the Act of 1994 reads as under:-“(i) sale or purchase of exempted goods;” The term exempted goods has been defined in Section 2(18) of the Act of 1994, which reads as under:-“(18)” exempted goods” means any goods exempted from tax in accordance with the provisions of this Act;” The power to exempt from levy of tax has been conferred upon the State Government in Section

15 of the Act, which is reproduced in extenso:-“15. Exemption of tax.-Notwithstanding anything contained in this Act, where the State Government is of the opinion that it is necessary or expedient in the public interest so to do, it may, by notification in the Official Gazette the, exempt fully or partially, whether prospectively or retrospectively from the tax the sale or purchase of any goods or class of goods or any person or class of persons, without any condition or with such condition as may be specified in the notification.” From the perusal of the above definition, it is clear that the State Government can exempt in public interest fully or partially, whether prospectively or retrospectively, whether conditionally or unconditionally sale or purchase of any goods or class of goods or any person or class of persons from tax. Thus, the power of State Government is almost unlimited to grant exemption from payment of tax. The notification in question, by which exemption on sale of stainless steel flats, ingots and billets was granted, is Notification No. S.O. 125 dated 09.07.1998, which is reproduced hereunder:-“S.O. 125.-In exercise of the powers conferred by Section 15, RST Act, 1994, and in supersession of this Department Notification No. F. 4(1) FD/Tax Div/97-108 dated 12.03.1997 (S. No. 1081), the State Government hereby exempts from tax the sale of stainless steel flats, ingots and billets, on the following conditions, namely:-

1. that such stainless steel flats, ingots and billets are used as raw material in the manufacture of stainless steel sheets, patta within the State.

2. that such manufactured stainless steel sheets, patta are sold within the State or in the course of inter-state trade or commerce, and

3. that such manufacturer shall issue a declaration to this effect in Form ST 17 appended to the

Rajasthan Sales Tax Rules, 1995, to the selling dealer.

This notification shall remain in force upto 31.03.2000.”

2. The Tax Board construing this notification, held that the sale or purchase of stainless steel flats, ingots and billets was exempted subject to specified conditions in the said notification and such goods exempted under the said notification fall within the definition of exempted goods as defined in Section 2(18) of the Act and, therefore, the turnover relating to sale or purchase of these goods subject to fulfillment of the conditions specified in that notification was of exempted goods and, therefore, such turnover could not form part of the turnover on which turnover tax is levied under Section 13-A of the Act in view of Section 13-A(2)(i) of the Act. The Tax Board has held that the words exempted goods as used in Section 13-A(2)(i) of the Act will have to be construed in the light of definition of exempted goods given under Section 2(18) of the Act, which means any goods exempted from tax in accordance with the provisions of this Act. The exemption from tax given under a notification issued in exercise of powers conferred under Section 15 of the Act would naturally mean that those goods are exempted in accordance with the pr