Coconut classification as oil-seed under sales tax law resolved in favour of the assessee.

Coconuts were held to fall within the statutory meaning of oil-seeds under section 3-AA(1)(vi) of the U.P. Sales Tax Act. The court reasoned that the provision covers seeds yielding non-volatile oils used for human consumption or industry, and that the coconut is both the reproductive unit of the plant and a commodity commercially understood as an oil-yielding seed. Applying the settled rule that ambiguity in a taxing statute must be resolved in favour of the taxpayer, the assessee succeeded and coconuts were classified for tax purposes under the special provision rather than the general charging section.

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Issues: Whether coconuts are oil-seeds within the meaning of section 3-AA(1)(vi) of the U.P. Sales Tax Act and are consequently liable to tax under that provision rather than under the general charging section.

Analysis: Section 3-AA of the U.P. Sales Tax Act was enacted to give effect to article 286(3) of the Constitution of India and incorporates the special category of goods of declared importance found in the Central Sales Tax Act, 1956. The statutory definition of oil-seeds covers seeds yielding non-volatile oils used for human consumption or in industry. Coconut yields edible and commercial oil, and the whole coconut functions as the reproductive unit of the coconut plant. The commodity is also treated in the market as an oil-seed. In a taxing statute, where two views are possible, the construction favourable to the taxpayer is to be preferred.

Conclusion: Coconuts are oil-seeds within section 3-AA(1)(vi) of the U.P. Sales Tax Act and the assessee succeeds.

Ratio Decidendi: A commodity answering both the statutory definition and its commercial understanding as an oil-yielding seed must be classified as an oil-seed for sales tax purposes, and any ambiguity in a taxing provision must be resolved in favour of the assessee.

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