Firewood exemption construed strictly: wood sold for pulp manufacture was outside the sales tax exemption.

A sales tax exemption for firewood was confined to wood sold and used as firewood; the decisive factor was the commercial purpose of the sale. Wood supplied for conversion into pulp for rayon manufacture, though capable of being used as firewood and described that way in the contract, did not fall within the exemption. The court applied the principle that fiscal exemptions must be construed strictly and not extended beyond their clear scope. Sales tax was therefore upheld.

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Issues: Whether wood supplied for conversion into pulp for manufacture of rayon could be treated as firewood and thereby qualify for exemption from sales tax under the relevant notification.

Analysis: The exemption under the notification issued under Section 17 of the Tamil Nadu General Sales Tax Act, 1959 was confined to firewood meant to be sold and used as firewood. Although the goods may have been capable of being used as firewood and may even have been described in the contract in that manner, the decisive factor was the commercial purpose of the sale. Where the wood was sold to be converted into pulp for manufacturing rayon, it was not sold as firewood within the meaning and object of the exemption. A fiscal exemption cannot be extended beyond its clear scope.

Conclusion: The goods were not entitled to exemption as firewood and the levy of sales tax was upheld.

Final Conclusion: The appeals failed because the exemption was held inapplicable to wood sold for pulp manufacture rather than for use as firewood.

Ratio Decidendi: A sales tax exemption for firewood applies only when the goods are sold for use as firewood, and not when wood, though capable of being used as firewood, is sold for conversion into pulp or other manufacturing use.

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