Agricultural produce exemption does not extend to rab or jaggery after processing into a distinct commodity.

Rab or jaggery is not covered by the proviso to section 2(i) of the U.P. Sales Tax Act as "agricultural or horticultural produce" grown by a person or on land in which he has an interest. The Court applied the plain meaning of the statutory language and distinguished produce that retains its original identity after processing from a commodity that becomes a different article. While items such as wheat, rice or pulses may remain agricultural produce despite limited processing, rab was treated as a transformed commodity. It therefore falls outside the exemption from turnover and is not exempt from sales tax on that basis.

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Issues: Whether rab or jaggery is "agricultural or horticultural produce, grown by a person or grown on land in which he has an interest" within the meaning of the proviso to section 2(i) of the U.P. Sales Tax Act, so as to be excluded from turnover and exempt from sales tax.

Analysis: The expression used by the Legislature was construed according to its plain and appropriate meaning. The Court held that while produce such as wheat, rice or pulses may still be described as agricultural produce even after some processing, the same form of expression cannot appropriately be applied to rab or jaggery. The Court distinguished between produce that retains its original identity after processing and produce that becomes an altogether different commodity. Rab was treated as falling in the latter category, and the reasoning of earlier Madras decisions on the point was accepted.

Conclusion: Rab or jaggery does not fall within the proviso to section 2(i) of the U.P. Sales Tax Act and is not exempt from sales tax on that basis.

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