DWARKA PRASAD, J. - This reference has been made by the Board of Revenue for Rajasthan at Ajmer under section 15(3A) of the Rajasthan Sales Tax Act, 1954 (hereinafter called "the Act"), at the direction of this Court and following questions of law arising out of the order of the Board of Revenue dated 23rd January, 1970, have been referred :

"(1) Whether the assessing authority was justified in treating the exemption certificate not valid, even when it was not properly cancelled ?

(2) Whether the period of 30 days prescribed under rule 12 of the Act for filing renewal application is directory and whether the assessing authority was not competent to ignore the renewal on the ground of delay in the submission of the application and taking into consideration the turnover for the period from 1st April, 1957, to 5th May, 1957 ?"

The assessee is a dealer registered under the Act and carries on the business of selling allopathic medicines. The Government of Rajasthan by Notification No. F.21(7)SR/55 dated 14th April, 1955, granted exemption from payment of sales tax to dealers in allopathic medicines subject to their obtaining an exemption certificate on payment of fixed annual fee of Rs. 10. The assessee obtained an exemption certificate in accordance with the aforesaid notification, regarding the sale of allopathic medicines on 3rd June, 1957, for the financial year 1957-58. During the proceedings for assessment of sales tax for the period from 1st April, 1957, to 31st March, 1958, the assessee claimed exemption on the basis of the aforesaid certificate in respect of sales of allopathic medicines for the period from 1st April, 1957, to 5th May, 1957, as the provisions in respect of exemption were modified by the notification dated 6th May, 1957. The assessing authority, namely, Commercial Taxes Officer, Jodhpur, disallowed the assessee's claim for exemption on the ground that he had applied for renewal of the exemption certificate on 7th May, 1957, while the exemption could have been granted under the notification dated 14th April, 1955, up to 5th May, 1957, only. According to rule 12 of the Rajasthan Sales Tax Rules, 1955, an application for granting an exemption certificate or renewal thereof could have been filed within 30 days, i.e., up to 30th April, 1957.

The assessee filed an appeal before the Deputy Commissioner (Appeals), Commercial Taxes, Jodhpur, who dismissed the appeal by his order dated 22nd June, 1962. The assessee thereafter preferred a revision petition before the Board of Revenue for Rajasthan at Ajmer. A Division Bench of the Board of Revenue dismissed the revision petition by its order dated 21st March, 1969, holding that according to the notification dated 14th April, 1955, it was a condition precedent for obtaining benefit of the exemption that the assessee must hold a valid certificate of exemption. It was further held that the post-dated certificate could not form the basis of relief retrospectively.

The assessee thereafter filed an application before the Board of Revenue under section 15(1) of the Act, requesting it to refer to this Court questions of law arising out of its order passed on the revision petition. However, as the Board of Revenue failed to dispose of the application under section 15(1) within the period of 180 days, the assessee applied to this Court under section 15(3A) of the Act, praying that the Board of Revenue may be directed to refer three questions to this Court for its opinion. This Court, by its order dated 28th August, 1970, reframed the questions and directed the Board of Revenue to refer the questions mentioned above to this Court for its opinion. Thereupon, the Board of Revenue by its order dated 13th April, 1972, submitted a statement of case and referred the aforesaid two questions to this Court.

Sub-section (2) of section 4 of the Act authorises the State Government, by issuing a notification in the Official Gazette, to exempt from tax under the Act any goods or clas