Strict construction of tax exemption: "processing" does not include manufacture of bread and biscuits under ejusdem generis.

A taxing exemption notification covering processing of cereals and pulses was construed strictly and, applying ejusdem generis, the general word "processing" was confined to activities akin to thrashing, sifting and cleaning. It did not extend to manufacture of bread and biscuits, because processing and manufacture are not equivalent and manufacture is only the end result of one or more processes. The supporting material relied on by the assessee did not justify enlarging the exemption to manufactured goods. The turnover of bread and biscuits was therefore held taxable, and the exemption claim was rejected.

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Issues: Whether the turnover of bread and biscuits was exempt from tax under the notification covering processing of cereals and pulses.

Analysis: The notification, read as a whole, confined the exemption to processing akin to the specific words preceding it in the Hindi version, such as thrashing, sifting and cleaning. Applying the principle of ejusdem generis, the general expression "processing" could not be enlarged to cover manufacture of bread and biscuits. The Court held that processing and manufacture are not equivalent, and that manufacture is only the end result of one or more processes. The language of the notification and the supporting material relied upon by the assessee did not justify extending the exemption to manufactured goods like bread and biscuits. As a taxing exemption, the notification had to be construed strictly.

Conclusion: The word "processing" in the notification does not include manufacture of bread and biscuits, and the assessee was liable to tax on their turnover.

Final Conclusion: The revision failed and the Tribunal's view denying exemption was sustained, leaving the turnover of bread and biscuits taxable.

Ratio Decidendi: In an exemption notification, a general expression must be confined by the specific words accompanying it where ejusdem generis applies, and "processing" does not ordinarily include "manufacture" unless the notification clearly says so.

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