Strict construction of exemption notifications: toffee was not treated as sweetmeat, preserving sales tax exemption eligibility.

An exemption notification for new industrial units under the Uttar Pradesh Sales Tax Act had to be construed strictly, and its exclusion for "sweetmeat" or "commodities of like nature" was confined to similar items in ordinary commercial understanding. The Court applied the popular parlance test in the relevant local market, rather than a broad dictionary or foreign meaning, and held that toffee was not understood as mithai or as a similar commodity. The manufacturing units therefore remained eligible for the sales tax exemption and the eligibility certificate.

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Issues: Whether toffees manufactured by newly established industrial units fell within the expression "sweetmeat" or "commodities of like nature" in the exclusionary entry of the exemption notification issued under section 4-A of the Uttar Pradesh Sales Tax Act, 1948, so as to deny the units eligibility for sales tax exemption.

Analysis: The notification was intended to encourage new industrial units making substantial capital investment, while excluding certain industries specifically listed in annexure II. The expression "sweetmeat" had to be construed in the context of that notification and by reference to its object, not merely by a wide dictionary meaning. The exclusionary part of an exemption notification is to be construed strictly, and the words "commodities of like nature" widened the exclusion only to similar commodities, not the meaning of "sweetmeat" itself. The proper test was the popular parlance test in India, particularly in Uttar Pradesh, and not how toffee may be understood in its place of origin. On the evidence, toffee was not understood by dealers or consumers as mithai or sweetmeat, nor as a commodity of the same nature as the items specifically excluded.

Conclusion: Toffee was not covered by the expression "sweetmeat" or "commodities of like nature" in the notification, and the industrial units manufacturing toffees were entitled to the sales tax exemption and eligibility certificate.

Ratio Decidendi: An exclusionary entry in an exemption notification must be construed strictly in light of the notification's object, and a commodity is to be classified by its ordinary commercial understanding in the relevant local market rather than by dictionary meaning or foreign usage.

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