M/S. MODI SPINNING & WEAVING MILLS CO., LTD. vs COMMISSIONER OF INCOME-TAX, PUNJAB & ANR.

The Supreme Court held that the registration certificate under Section 7 of the Punjab General Sales Tax Act, 1948 must be read in conjunction with the amended provisions of Section 5(2)(a)(ii) and Rule 26, which require that goods must be used in the manufacture within Punjab to qualify for tax exemption. The Court ruled that the appellants' claim for exemption on unginned cotton was invalid as the manufacturing process must occur in Punjab, and the existing registration certificate did not exempt them from this requirement. Additionally, the Court found that the provisions of Sections 4 and 5 of the Act were not inoperative despite the conflict with the Central Sales Tax Act, 1956, as the necessary amendments were impliedly incorporated.