Fiscal exemption for cereals extended to chira and muri; writ relief remained available when statutory remedy proved ineffective.

A fiscal exemption for all cereals and all forms of rice was held to cover chira and muri because simple processing did not destroy their essential character as rice or foodgrains. The exemption clause was construed strictly, but any real ambiguity was resolved in favour of the taxpayer, and the assessee therefore obtained sales tax exemption under Item 1 of Schedule 3. The existence of statutory appellate or revisional remedies did not absolutely bar writ relief, and Article 226 remained available where the ordinary remedy had become ineffective without the assessee's fault. On that basis, the impugned assessment orders were quashed.

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Issues: (i) Whether chira and muri fall within the exemption for all cereals and all forms of rice under Item 1 of Schedule 3 to the Assam Sales Tax Act, 1947. (ii) Whether relief under Article 226 of the Constitution of India was maintainable despite the statutory remedies under the Assam Sales Tax Act, 1947.

Issue (i): Whether chira and muri fall within the exemption for all cereals and all forms of rice under Item 1 of Schedule 3 to the Assam Sales Tax Act, 1947.

Analysis: The exemption clause covered all cereals and pulses, including all forms of rice, and had to be construed strictly, but not so narrowly as to defeat its plain breadth. Chira and muri were treated as retaining the character of rice or cereal after simple processes of parching, boiling, flattening, or husking, and were not shown to have lost their essential identity as foodgrains. The broader context of the schedule supported an intention to exempt necessaries of life, and where the phrase remained capable of a wider and narrower meaning, the ambiguity had to be resolved in favour of the taxpayer.

Conclusion: Chira and muri were exempt from sales tax under Item 1 of Schedule 3, and the finding was in favour of the assessee.

Issue (ii): Whether relief under Article 226 of the Constitution of India was maintainable despite the statutory remedies under the Assam Sales Tax Act, 1947.

Analysis: The existence of an appellate or revisional remedy did not create an absolute bar to writ jurisdiction. The statutory application had been made within time, the Commissioner had examined the matter and had effectively formed the view that exemption ought to have been granted, and the later loss of the ordinary remedy could not be attributed to negligence or laches on the assessee's part. In the circumstances, the case justified intervention under the writ jurisdiction to prevent illegality and injustice.

Conclusion: Relief under Article 226 was maintainable, and the writ petition succeeded in favour of the assessee.

Final Conclusion: The assessment orders were quashed, and the assessee obtained exemption for chira and muri along with writ relief against enforcement of the impugned orders.

Ratio Decidendi: Where a fiscal exemption clause is reasonably capable of including the goods in question, ambiguity must be resolved in favour of the taxpayer, and the availability of a statutory remedy does not necessarily bar writ relief where that remedy has become ineffective without the assessee's fault.

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