Sugar exemption covers misri and batasha when they remain pure sugar without added ingredients.

The article explains that, for a sales tax exemption entry using the word "sugar" without restrictive wording, the term extends to sugar in any commercially recognised form so long as it remains sugar and is not converted into another commodity by admixture of foreign ingredients. It further states that misri and batasha, being made entirely from sugar and involving only a change in shape or crystallisation, fall within the exempting entry. The underlying principle is that mere alteration in form does not change the essential character of sugar, whereas addition of other substances may do so.

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Issues: (i) Whether the expression "sugar" in entry No. 9 of the Second Schedule to the Bengal Finance (Sales Tax) Act, 1941 meant only one narrow form of sugar or any form of sugar containing more than 90 per cent sucrose; (ii) whether misri and batasha were "sugar" within that entry and thus exempt from tax.

Issue (i): Whether the expression "sugar" in entry No. 9 of the Second Schedule to the Bengal Finance (Sales Tax) Act, 1941 meant only one narrow form of sugar or any form of sugar containing more than 90 per cent sucrose.

Analysis: The statutory scheme exempted goods in the Second Schedule, while other scheduled and unscheduled goods attracted tax at different rates. The expression "sugar" was not qualified by restrictive words, and the Court treated the market understanding of sugar as including several commercially recognised forms produced from sugarcane, ranging from refined sugar to bura and khandsari. The Court also noted that food standards recognised sugar products with sucrose content above 90 per cent, and that the relevant concept was not confined to powdered or refined sugar alone. The presence or absence of added ingredients was material, but mere change in shape or form was not.

Conclusion: The expression "sugar" in entry No. 9 covered sugar in any form, provided it remained sugar and was not converted into a different commodity by admixture of other ingredients.

Issue (ii): Whether misri and batasha were "sugar" within that entry and thus exempt from tax.

Analysis: Misri and batasha were found to be products made entirely from sugar, without any additive or foreign ingredient. Misri was treated as a purified and crystallised form of sugar with high sucrose content, and batasha as sugar converted into a different shape for use as such. The Court distinguished products like icing sugar, which contain starch or other additives, and held that a mere alteration in shape does not change the essential character of sugar. On that basis, misri and batasha were held to remain sugar within the exempting entry.

Conclusion: Misri and batasha were sugar within the meaning of entry No. 9 and were exempt from sales tax.

Final Conclusion: The reference was answered in favour of the assessee, and the exemption under the Second Schedule was held applicable to misri and batasha.

Ratio Decidendi: For a tax exemption entry using the word "sugar" without restrictive qualification, sugar remains exempt when it is merely transformed into another form or shape and contains no additive or foreign ingredient; only admixture with other substances changes its character into a different commodity.

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