DELHI CLOTH AND GENERAL MILLS CO. LTD. vs STATE OF RAJASTHAN AND ORS.

The Supreme Court held that the unconditional exemption from sales tax for rayon fabrics under Section 4(2) of the Rajasthan Sales Tax Act, 1954, was valid until it was withdrawn by a notification on 5th March 1973, which imposed conditions for exemption based on the payment of additional excise duties under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The Court clarified that the exemption under Item 18 of the Schedule to the Rajasthan Sales Tax Act does not require prior payment of excise duties for rayon fabrics. The Court ruled in favor of the appellant, allowing the exemption claim for rayon tyre cord fabric.