Sealed containers for sales tax exemption mean commercially sealed packs, not mere wrapping or packing without a seal.

Confectionery wrapped in cellophane and placed in cardboard boxes without any seal, label fastening, or other closure was not treated as confectionery sold in sealed containers for the sales tax exemption exclusion. The court construed "sealed containers" in its commercial sense and held that the exclusion applied only where the manufacturer sealed the container so that access required breaking the seal. Applying strict construction of exemption clauses against the taxing authority, the disputed turnover remained within the exemption and the answer was returned in favour of the assessee.

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Issues: Whether confectionery wrapped in cellophane and kept in cardboard boxes with lids not fastened by any seal or label could be treated as confectionery sold in sealed containers so as to fall outside the exemption under the sales tax notification.

Analysis: Section 4 of the U.P. Sales Tax Act, 1948 empowered the State Government to exempt specified sales by notification, and clause (2) of Notification No. S.T.-118/X-929-48 dated 7th June, 1948 excluded only cooked food and confectionery sold in sealed containers. The expression "sealed containers" was construed in its commercial sense in the setting of the exemption, and the exclusion was held to apply only where the confectionery was put up in containers sealed by the manufacturer in a manner that access to the contents required breaking the seal or fastening. Mere secure wrapping or packing for delivery, without any seal, signet, or label fastening the container, did not answer that description. Exemption clauses are to be strictly construed against the taxing authority and in favour of extending the benefit to the class intended to be exempted.

Conclusion: The disputed turnover was not turnover of confectionery sold in sealed containers, and the answer was returned in favour of the assessee.

Ratio Decidendi: For the purpose of a tax exemption notification, "sealed containers" denotes containers sealed in the commercial sense so that access to the contents requires breaking the seal, and mere secure wrapping or packing without such a seal does not attract the exclusion from exemption.

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