composition dealer

Yes, they can sale both taxable as well as exempt goods

However composition tax is to be paid only on turnover of taxable goods and not on exempt sales

Yes, refer to notification 1/2018 dt 1-1-2018

under that notification clause b

Link for notification is 

https://cbec-gst.gov.in/pdf/central-tax/Notification-1-2018-central_tax-English.pdf

what is your query?

Harsh

As already mentioned, composition dealer can sell  both exempt as well as taxable goods together.

There is no such restriction that they cant sell both together. 

Condition states that they cannot engage in Non taxable supply, however, a Composition dealer can make Exempt supply which is different from taxable supply. You can refer definition of 'Exempt supply (section 2(47)' & 'Non taxable supply (Section 2(78)' for further clearance