Strict construction of tax exemptions: derived hotel products were not exempt, and Article 286(3) did not bar the levy.

Tax exemption must be confined to the express language of the statute and cannot be extended by analogy to products derived from exempt goods. On that approach, hotel articles made from rice or flour were not exempt merely because the underlying materials appeared in the exempted schedule, since the exemption provision was treated as exhaustive. Article 286(3) also did not bar the levy because the Essential Supplies Temporary Powers Act, 1946 was not shown to be a parliamentary declaration that the disputed commodities were essential for the life of the community. The sales tax levy was therefore sustained.

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Issues: (i) Whether the hotel articles claimed by the petitioners could be treated as exempt from sales tax merely because they were forms or derivatives of goods expressly mentioned in the exempted schedule. (ii) Whether Article 286(3) of the Constitution of India barred the levy on the ground that the goods were covered by the Essential Supplies Temporary Powers Act, 1946.

Issue (i): Whether the hotel articles claimed by the petitioners could be treated as exempt from sales tax merely because they were forms or derivatives of goods expressly mentioned in the exempted schedule.

Analysis: Exemption from tax must be gathered from the statute itself and cannot be enlarged by analogy or a priori reasoning. The fact that rice or flour is mentioned as exempt does not justify extending the exemption to products made from them unless such products are specifically included. The exemption provision was treated as exhaustive, and no omission could be supplied by implication.

Conclusion: The claimed articles were not exempt merely because they were derived from exempt goods, and the contention failed.

Issue (ii): Whether Article 286(3) of the Constitution of India barred the levy on the ground that the goods were covered by the Essential Supplies Temporary Powers Act, 1946.

Analysis: The reference to the Essential Supplies Temporary Powers Act, 1946 did not assist the petitioners, because that enactment dealt with regulation and control of essential commodities, whereas Article 286(3) referred to goods declared by Parliament to be essential for the life of the community. The two enactments were not in pari materia, and no parliamentary declaration identifying the disputed commodities as essential for the life of the community was shown.

Conclusion: Article 286(3) did not prevent the levy, and the constitutional challenge failed.

Final Conclusion: The exemption claim was rejected on strict statutory construction, and the constitutional objection did not displace the sales tax levy.

Ratio Decidendi: A tax exemption cannot be extended by analogy or implication beyond the express language of the statute, and Article 286(3) is attracted only where Parliament has declared the relevant goods to be essential for the life of the community.

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