Sales tax exemption for power-house timber rejected where goods were not used in actual generation or distribution of electricity.

Timber supplied for construction of a power-house did not qualify as goods used by an undertaking in the generation or distribution of electrical energy for sales tax exemption. The court read the word "in" in the exemption clause as requiring use in the actual process of generation or distribution, not merely in construction work connected with the power-house. Timber used for shutters or building works did not itself participate in, facilitate, or result in the supply of electrical energy. The exemption was therefore denied, and the issue was answered against the assessee and in favour of the Revenue.

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Issues: Whether timber supplied for construction of a power-house was goods used by an undertaking supplying electrical energy to the public in the generation or distribution of electrical energy, so as to qualify for deduction under the sales tax exemption.

Analysis: The exemption covered sales of goods for use by an undertaking in the generation or distribution of electrical energy. The decisive question was the scope of the word "in" in the provision. Reading the clause as a whole, the words "in the generation or distribution of such energy" required the goods to be used in the actual process of generation or distribution, not merely in construction works connected with a power-house. Timber used for shutters or for building the power-house did not itself partake in, facilitate, or result in the generation or distribution of electrical energy. Giving the exemption the wider meaning suggested would remove the limiting words from the statute and disregard the plain language of the clause.

Conclusion: Timber supplied for construction of the power-house was not goods used in the generation or distribution of electrical energy within section 5(2)(a)(iv) of the Act. The question was answered in the negative, against the assessee and in favour of the Revenue.

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