Distinct commercial commodities under sales tax law: butter and ghee remain separately taxable despite contextual use of "including".

Butter and ghee were treated as distinct commercial commodities under the U.P. Sales Tax Act and the impugned notification. The word "including" in the entry for ghee was read in context and did not collapse the distinction between butter and ghee. As butter attracted purchase tax on the first purchase, the sale of ghee manufactured from that butter remained a separate taxable turnover. The assessee's sales of ghee were therefore held liable to sales tax, and the view that they were not taxable was not sustained.

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Issues: Whether ghee sold by the assessee, manufactured from butter purchased by him, was liable to sales tax under the impugned notification and section 3-D(2) of the U.P. Sales Tax Act, or whether it was covered by the tax already paid on the first purchase of butter.

Analysis: Butter and ghee were treated as distinct commercial commodities. The notification taxed the first purchase of the notified goods and described the entry as "ghee including butter, cheese and cream other than butter, cheese or cream sold in sealed or tinned containers". Read in the light of the earlier pattern of taxing milk products separately, the word "including" was construed in its contextual sense and not as obliterating the distinction between butter and ghee. The assessee's purchase of butter attracted purchase tax under section 3-D(1)(b), while the sale of ghee manufactured from that butter remained a separate taxable turnover under section 3-D(2).

Conclusion: The sales of ghee by the assessee were liable to sales tax and the Tribunal's view that they were not taxable could not be sustained.

Ratio Decidendi: Where a taxing notification and the statutory scheme show that the goods are separately recognised as distinct commercial commodities, the term "including" must be construed according to context and does not necessarily merge one commodity into another for tax purposes.

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