Taxing notification ambiguity: sewing machines and spare parts remained at the general rate, not the enhanced machinery rate.

Deletion of the specific notification entry for sewing machines and spare parts did not justify shifting those goods into the enhanced machinery rate by implication. The general rate under Section 5(1) continued to apply because the taxing notification, read with the Gazette publication, did not clearly bring the goods within the higher-rate entry. In a taxing statute, ambiguity must be resolved in favour of the assessee, and a higher rate cannot be imposed by extending an entry beyond its clear terms. The turnover of sewing machines and spare parts was therefore taxable only at the general rate, and the enhanced assessment was unsustainable.

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Issues: Whether, after deletion of the specific entry for sewing machines and parts from the taxing notification, the sales turnover of such goods remained taxable at the enhanced rate under the machinery entry or reverted to the general rate under Section 5(1) of the Orissa Sales Tax Act, 1947.

Analysis: The Act prescribed a general rate of tax, while the proviso to Section 5(1) empowered the State Government to specify higher or lower rates by notification. The relevant notification originally treated sewing machines and parts as a separate class, and its later deletion did not clearly bring those goods within the machinery entry. The contemporaneous Gazette publication supported the view that, on deletion of the special entry, the goods became liable only at the general rate. In a taxing statute, any ambiguity must be resolved in favour of the assessee, and the enhanced rate could not be imposed by stretching the machinery entry beyond its clear terms.

Conclusion: The turnover of sewing machines and spare parts was liable only at the general rate of 5 per cent, and the Commissioner's adoption of the enhanced rate was unsustainable.

Ratio Decidendi: Where a taxing notification is ambiguous as to whether goods fall within an enhanced-rate entry, the ambiguity must be construed in favour of the assessee and the higher rate cannot be applied by implication.

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