Continuing tax exemption prevails over later taxing notification unless the exemption is expressly withdrawn or modified.

A subsisting sales tax exemption under section 4 of the U.P. Sales Tax Act continues until it is expressly rescinded or modified. A later notification issued under section 3-A(2) specifying goods as taxable does not, by itself, withdraw an existing exemption. The Act must be construed strictly, and any ambiguity is resolved in favour of the taxpayer. If the State intends to tax goods previously exempted, it must amend or withdraw the exemption notification directly; absent such action, the exemption remains operative for turnover of kulfi and lassi served to customers.

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Issues: Whether the turnover of kulfi and lassi continued to enjoy exemption under the earlier exemption notification notwithstanding a later notification issued under section 3-A(2) of the U.P. Sales Tax Act treating such goods as taxable when served to customers.

Analysis: The exemption granted under section 4 of the U.P. Sales Tax Act operated independently of the power to specify goods and point of sale under section 3-A(2). A fiscal statute must be construed strictly, and any ambiguity must be resolved in favour of the subject. The later notification under section 3-A(2) could not, by itself, withdraw a subsisting exemption under section 4. If the State intended to tax the goods, it ought to have amended or withdrawn the exemption notification; in the absence of such action, the exemption remained effective.

Conclusion: The turnover of kulfi and lassi remained exempt from tax until the exemption notification was rescinded or modified, and the revision was liable to be dismissed.

Final Conclusion: The decision affirms that a later taxing notification does not displace a continuing exemption unless the exemption itself is expressly withdrawn or altered.

Ratio Decidendi: A specific tax exemption continues to operate until expressly rescinded or modified, and a provision specifying goods for taxation cannot override a subsisting exemption in the absence of an express withdrawal.

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