1. As identical questions of fact and law are involved in both the writ petitions, the same are disposed of by a common order.

2. Writ Petition No. 105 of 1981 has been filed by Jaipur Wool and Namda Association, a company registered under the Rajasthan Non-Trading Companies Act, 1960, for promoting the cause of the persons who are interested in the manufacture, sale and purchase of woollen felts. Writ Petition No. 359 of 1982 has been filed by M/s. Premier Felt Manufacturing Company which is carrying on business of manufacturing woollen felt at Rani Bazar, Bikaner. In the writ petition filed by Jaipur Wool and Namda Association it has been prayed that the respondents may be prohibited by a writ of prohibition not to recover any amount from the members of the petitioner-company whose names have been given in annexure 1 with regard to inter-State sales tax as the amount has already been paid to the State in the form of additional excise duty every year. It has been further prayed that the respondents may be further directed by a writ of mandamus or any other appropriate writ, order or direction not to claim any amount as inter-State sales tax for the period commencing from 1965 up till 1976, as mentioned in the notification dated 21st August, 1979, for which additional excise duty in lieu of sales tax had already been deposited and lying to the credit of the account of State. A similar kind of prayer has been made in Writ Petition No. 359 of 1982 filed by the petitioner M/s. Premier Felt Manufacturing Company relating to the petitioner alone.

3. Relevant facts leading to the filing of these writ petitions are that manufacturers of woollen felt were required to pay at the relevant period from 1965 to 1976 Central excise duty, additional excise duty and handloom cess at the rate of 6 per cent ad valorem, 5 per cent ad valorem and 1.9 paisa per square metre respectively. The manufacturers continued to deposit the Central excise duty and additional excise duty. Prior to 1965 no Central excise duty was being charged on the woollen felt and namda manufactured in Rajasthan. However, in view of a letter dated 7th October, 1966, issued by the Central Board of Excise and Customs, New Delhi, the Excise Department started charging excise duty from the manufacturers. Under the Central Excises and Salt Act, 1944 (hereinafter referred to as "the Act"), tariff is given which includes all woollen fabrics under item No. 21 of the said Schedule. The department took the view that the definition as given in the tariff at item No. 21 of the First Schedule to the Act was wide enough to include any woollen fabric, knitted, felted or bonded and textile material (woollen based) for the above purpose and all the Collectors of the Central Excise were advised to charge basic duty, additional excise duty in lieu of sales tax, special duty and cess as provided in the Central Excise Tariff under item No. 21.

4. The levy of excise duty on the woollen felt was held to be illegal by the Gujarat High Court and thereafter the same view was taken by this Court in S. Zorester & Co. (Supplies) Pvt. Ltd. v. Union of India 1976 RLW 185 in which it was held that the woollen felt manufactured by the firm could not be taxed under item No. 21 of the First Schedule to the Act. The aforesaid view was also affirmed by the Supreme Court and it was held that felt is not woollen fabric and as such cannot be taxed under item No. 21 of the First Schedule to the Act. In view of the aforesaid decisions the State Government issued the following notification on 21st August, 1979 :

NOTIFICATION Jaipur, August 21, 1979.

In exercise of the power conferred by Sub-section (2) of Section 4 of the Rajasthan Sales Tax Act, 1954 (Rajasthan Act No. XXIX of 1954), the State Government being of the opinion that it is expedient in public interest so to do, hereby exempts retrospectively from tax the sale or purchase of woollen felts from 25-8-1965 to 22-4-1976 on the following conditions :-

1. The dealer (manufacturer) concerned has already paid additional excise duty in lieu of sales tax and that such dealer has not collected sales tax on the purchase or sale of woollen felts;

2. Such dealer concerned has not obtained refund of additional excise duty so paid from the Central Government; and

3. Such dealer concerned gives an undertaking that he shall not claim refund of such additional excise duty from the Government of India.

[No. F. 4 (31) FD/Gr. IV/77-19] By Order of the Government Sd/- Y. Sharma Dy. Secretary to the Government.

5. The case of the petitioners is that under the aforesaid notification, it was made absolutely clear that all those dealers who had paid additional excise duty in lieu of sales tax for the period commencing from 25th August, 1965, to 22nd April, 1976, would not be required to pay any further sales tax. It is contended that the petitioners had admittedly paid additional excise duty in lieu of sales tax and were thus totally exempted for the above period to pay any sales tax, but in spite of that the Commercial Taxes Officer in an illegal and arbitrary manner was raising demand of Central sales tax on the plea that the said notification did not apply to inter-State sales. It is also the case of the petitioners that the sale or purchase of woollen felts from 25th August, 1965, to 22nd April, 1976, has been exempted totally from sales tax without any circumstances or conditions and as such their case is covered under Section 8(2A) of the Central Sales Tax Act. It would be proper to reproduce the provisions of Section 8(2A) of the Central Sales Tax Act at this stage for properly deciding the question involved in these cases :

Section 8(2A). Notwithstanding anything contained in Sub-section (1A) of Section 6 or Sub-section (1) or Clause (b) of Sub-section (2) of this section, the tax payable under this Act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is, under the sales tax law of the appropriate State, exempt from tax generally or subject to tax generally at a rate which is lower than four per cent (whether called a tax or fee or by any other name), shall be nil or, as the case may be, shall be calculated at the lower rate.

Explanation :-For the purposes of this sub-section a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that law the sale or purchase of such goods is exempt only in specified circumstances or Under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods.

6. It is submitted by the petitioners that neither under the notification issued by the State Government on 21st August, 1979, nor under Section 8(2A) of the Central Sales Tax Act, the State Government or the other respondents are entitled to demand any tax on the inter-State sales of woollen felt during the relevant period. It is submitted that in spite of oral requests and written representations, the respondents are not willing to withdraw their illegal demand and are bent upon harassing the petitioners and insisting upon them to deposit the amount as assessed.

7. In reply to the aforesaid submissions, the respondents have urged that the exemption from State sales tax under the notification dated 21st August, 1979, is subject to specified circumstances and specified conditions and is not a total exemption in general and as such Section 8(2A) and its explanation of the Central Sales Tax Act is not attracted. The explanation to Section 8(2A) of the Central Sales Tax Act makes it clear that a sale or purchase of goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions. It is further urged that under the notification, dated 21st August, 1979, exemption is admissible if the following three circumstances exist, namely, (1) the dealer (manufacturer) concerned has already paid additional excise duty; (2) such dealer concerned has not collected sales tax on the purchase or sale of woollen felts and (3) such dealer has not obtained refund of additional excise duty so paid from the Central Government. It is further submitted that apart from the above mentioned circumstances the exemption is subject to the condition that an undertaking is given that he shall not claim refund.

8. We have given careful consideration to the arguments advanced by learned counsel for both the parties and have carefully gone through the record.

9. The main controversy in the case hinges on the question whether the exemption granted under the notification dated 21st August, 1979, is a total exemption generally under the Rajasthan Sales Tax Act or is subject to specified circumstances and conditions, so as to attract the provisions of section 8(2a) along with the explanation of the Central Sales Tax Act. We would first deal with the cases cited at the Bar.

10. In a case decided by the Allahabad High Court in Hindustan Safety Glass Works (P.) Ltd. v. State of Uttar Pradesh [1974] 34 STC 209 the facts were that the company manufactured toughened glasses and mirrors in its factories. Under a notification issued by the State Government under the said Act sales of mirrors and safety glasses were liable to sales tax either at the point of sale by the importer of such goods or at the point of sale by the manufacturer thereof. Subsequently, a notification was issued by the State Government exempting toughened glasses and mirrors manufactured by the company at Allahabad from payment of sales tax for a period of three years. The company claimed that the turnover of the sales of toughened glasses and mirrors manufactured by it, being generally exempt from tax under the said Act, was also not liable to Central sales tax because of the provisions contained in Section 8(2A) of the Central Sales Tax Act. It was held that for purposes of Section 8(2A) of the Central Act, sale of mirrors and toughened glasses manufactured by the company was under no condition and in no circumstances liable to be taxed in the hands of the company. The reasons given were that normally it will be taken that the sale of mirrors and toughened glasses by the company was exempt from tax generally unless it could be shown that such goods belonged to the class specified in the explanation to Section 8(2A) of the Central Act. As the toughened glasses and mirrors manufactured by the company did not fall in such a category, the turnover of the sales of those goods in the hands of the company was not liable to tax under the Central Act.

11. In Indian Aluminium Cables Ltd. v. State Of Haryana. [1976] 38 STC 108 (SC), the Supreme Court distinguished the case of the Madhya Pradesh High Court in Commissioner of Sales Tax, M.P. v. Kapoor Dori Niwar and Co., Gwalior [1968] 22 STC 152 and Hindustan Safety Glass Works' case [1974] 34 STC 209 of the Allahabad High Court. Regarding the Madhya Pradesh case [1968] 22 STC 152 it was obeserved by the Supreme Court as under:

In the Madhya Pradesh case [1968] 22 STC 152, there was no dispute that the sales effected by the assessee fell under Section 8(1) of the Central Act. The State Act granted exemption from sales tax on sales of niwar effected by a registered dealer. The exemption granted to sales by a registered dealer under the notification was without any restriction or limitation so for as sales by a registered dealer were concerned. Though the period of exemption was fixed. it was not regarded as a condition imposed in relation to the exemption. It was also contended there that because the exemption was granted to the registered dealers the exemption was granted to a class of dealers, and therefore, it should be construed to be an exemption in specified circumstances or under specified conditions. The court repelled the contention by stating that the exemption was to all registered dealers without any restriction or condition.

12. Regarding Hindustan Safety Glass Works' case [1974] 34 STC 209 it was observed as under:

The stipulation in the notification in Safety Glass Works' case [1974] 34 STC 209 that the turnover of such sales would for a period of three years be exempt from payment of sales tax did not amount to exempting the turnover of such goods from tax under specified circumstances or specified conditions.

13. Their Lordships of the Supreme Court in the aforesaid Indian Aluminium Cables Ltd. [1976] 38 STC 108 (SC) held as under :

Section 8(2A) of the Central Act exempts goods from inter-State sales tax where a tax law of the State has exempted them from sales tax. The explanation to Section 8(2A) of the Central Act takes away the exemption where it is not general and has been granted in specified circumstances or under specified conditions. The provisions contained in Section 5(2)(a)(iv) of the State Act exclude sales which are made under specified circumstances or specified conditions. The specified circumstances are that the sale must be to an undertaking engaged in supplying electrical energy to the public under a licence or sanction granted under the Indian Electricity Act, 1910. The specified condition is that the goods purchased by the undertaking must be used for the generation or distribution of electrical energy. If the circumstances do not exist or if the conditions are not performed then the sales of goods cannot be exempted from tax. General exemption means that the goods should be totally exempt from tax before similar exemption from the levy of Central sales tax can become available. Where the exemption from taxation is conferred by conditions or in certain circumstances, there is no exemption from tax generally.

The contention of the appellant that the words 'in the generation or distribution of such energy' in Section 5(2)(a)(iv) of the State Act are descriptive of goods is unacceptable. The expression 'generation or distribution of such energy' specifies the condition under which exemption is granted.

14. In Poysha Industrial Co. Ltd. v Commissioner of Sales Tax [1977] 40 STC 455 decided by the Allahabad High Court, the assessee claimed that the tin containers manufactured by it and sold in the course of inter-State trade in the assessment years 1969-70 and 1970-71 were not liable to tax under the Central Sales Tax Act since such sales within the State of Uttar Pradesh have been exempted from State sales tax under the notification dated 28th May, 1969. The assessee's claim was rejected by- the Judge (Revisions), who took the view that in view of the amendment of the notification by U. P. Act No. 38 of 1975, the assessee's sales of tin containers were not exempted generally, but were exempted only when such sales were made within the State and that, hence, the inter-State sales of such tin containers did not attract the exemption under Section 8(2A) of the Central Sales Tax Act. The Allahabad High Court observed as under :

We may point out that Indian Aluminium Cables Ltd. [1976] 38 STC 108 (SC) was decided both by the Supreme Court and the High Court in the light of Section 8(2A), as it stood after the amendment in 1972. The omission of the word 'dealer' by the amendment in 1972 is significant. But we are concerned with the unamended definition. The mischief sought to be remedied in 1958 was, as pointed out by us, only this that the mere exemption of goods under the State law did not mean that it was exempt under the Central Act as well. By Section 8(2A) it was confined only to those cases where the sales or purchases of such goods by a dealer enjoyed general exemption under the State law. In other words, it was not general exemption of goods but general exemption from sale or purchase of goods of a dealer in the State which entitled a dealer to claim exemption from calculation under the Central Act.

15. It was thus held that the effect of the notification was that the turnover of the assessee at the point of manufacture became exempt from tax generally.

16. On facts and in circumstances of that case it was held that the turnover of the assessee was exempt generally from State sales tax in view of the notification dated 28th May, 1969, as amended by notification dated 27th August, 1969, and consequently, its inter-State sales were also exempt from Central sales tax under Section 8(2A) of the Central Sales Tax Act.

17. In Deputy Commissioner of Agricultural Income-tax and Sales Tax, Central Zone, Ernakulam v. N. S. Moos [1975] 36 STC 169 the Kerala High Court did not agree with the view taken by the Allahabad High Court in Hindustan Safety Glass Works' case [1974] 34 STC 209 and observed as under:

The exemption granted for a period of three years, according to the learned Judge, was not an exemption under specified conditions or under specified circumstances. We are constrained to observe with respect that we find it difficult to agree with the principle of law enunciated in this decision, since it does not take note of the phraseology used in the relevant section and the explanation in the Central Act.

18. The Kerala High Court in the above case considered notification issued under Section 10(1) of the Kerala General Sales Tax Act, 1963, whereby the Government of Kerala granted exemption from sales tax on

"sale of medicines dispensed by a medical practitioner owning a dispensary and dispensing medicines to his patients from his own dispensary"

. It was held that such exemption was not general but was only for a limited purpose and under specified circumstances. The assessee was held not entitled to exemption under the Central Act.

19. The crucial question to be determined in the cases before us is whether the exemption granted under the notification dated 21st August, 1979, is a general exemption from State sales tax or is subject to specified circumstances or conditions. In the cases referred to above cited at the Bar, the facts and circumstances and the language of the notifications granting exemption were different to the language of the notification before us. The above cases, therefore, are not direct authorities on the question involved before us. The Supreme Court however, in Indian Aluminium Cable's case [1976] 38 STC 108 (SC) have laid down that general exemption means that the goods should be totally exempt from tax before similar exemption from the levy of Central sales tax can become available. Where the exemption from taxation is conferred by conditions or in certain circumstances, there is no exemption from tax generally. A perusal of the notification dated 21st August, 1979, clearly shows that exemption though allowed retrospectively from 25th August, 1965, to 22nd April, 1976, was subject to the circumstances (1) that the dealer concerned had already paid additional excise duty in lieu of sales tax; (2) that such dealer had not collected sales tax on the purchase or sale of woollen felts and (3) such dealer concerned had not obtained refund of additional excise duty so paid from the Central Government. The exemption is further subject to the condition that the dealer concerned gives an undertaking that he shall not claim refund of such additional excise duty from the Government of India. The notification itself makes a mention that the exemption has been granted subject to certain conditions. The notification itself thus uses the term "conditions", which goes to show that the exemption granted is not a general exemption. In the matter of taxation it is well-settled that the legislature has plenary powers and an assessee has to bring out its case clearly within the purview of exemption granted for a tax liability. The petitioners are liable to Central sales tax on the sale or purchase of woollen felts as regards inter-State sale. They are entitled to claim exemption only if their case is covered under Section 8(2A) and is not covered under its explanation. As already observed above the exemption granted under the notification dated 21st August, 1979, is not a general exemption but is subject to specified circumstances and conditions and as such the petitioners are liable to pay the Central sales tax.

20. The learned counsel for the respondents had also raised several preliminary objections regarding the non-maintainability of these writ petitions. But in view of the fact that we are deciding the writ petitions on merits in favour of the respondents, we have not proposed to deal with the preliminary objections.

21. In the result, these writ petitions fail and are dismissed with no order as to costs.