Single-point sales tax on khandsari sugar cannot be extended to kulia khand when it is only another form of the same commodity.

A notification issued on 25 November 1958 operated as an exemption under the U.P. Sales Tax Act and could not be treated as a charging provision for the earlier assessment years 1956-57 and 1957-58. Exclusion of khandsari sugar from the exemption did not by itself create tax liability. For the later years, the single-point levy applied only to sale by the importer or manufacturer of khandsari sugar. Kulia khand was found to be only another form of khandsari sugar, and the assessee, having prepared it from locally purchased khandsari sugar, was neither importer nor manufacturer. A second levy on the same commodity was therefore impermissible, and the question was answered in favour of the assessee.

---

---

Issues: Whether kulia khand was taxable under the notification dated 25 November 1958 and the later notification governing single-point levy on khandsari sugar.

Analysis: The notification dated 25 November 1958 operated as an exemption notification under section 4(1)(a) of the U.P. Sales Tax Act and not as a charging provision. It could not govern the earlier assessment years 1956-57 and 1957-58, and in any event exclusion of khandsari sugar from exemption did not by itself create a tax liability under that notification. For the later years, the relevant notification imposed tax only at the point of sale by the importer or manufacturer of khandsari sugar. Kulia khand was found to be only a different form of khandsari sugar and not a distinct commodity, and the assessee, who prepared it from locally purchased khandsari sugar, was neither importer nor manufacturer. A second levy on the same commodity was therefore impermissible on the facts found.

Conclusion: Kulia khand was not taxable under the notification of 25 November 1958, and the question was answered in the negative in favour of the assessee.

Ratio Decidendi: An exemption notification cannot be treated as a charging provision, and a product that is merely a different form of a taxable commodity cannot be subjected to a second levy when the statute or notification provides only single-point taxation at the manufacturer or importer stage.

---