Soyabean husk exemption: ordinary meaning of cereal brought the item within the sales tax notification.

Husk of soyabean was treated as covered by the exemption notification issued under the Madhya Pradesh General Sales Tax Act, 1958, which exempted husk of all grains, cereals, pulses and rice. The court read "cereal" in its ordinary sense as a grain used for food, and held that soyabean's use as food brought it within that description despite its character as an oil-seed. It also held that reference to section 14 of the Central Sales Tax Act was not justified for construing the State exemption notification. The husk was therefore exempt from turnover tax, and the issue was answered in favour of the assessee.

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Issues: Whether the husk of soyabean was covered by the exemption notification dated 7th April, 1967, and therefore not liable to turnover tax under the Madhya Pradesh General Sales Tax Act, 1958.

Analysis: The notification issued under section 12 of the Madhya Pradesh General Sales Tax Act, 1958 exempted husk of all grains, cereals, pulses and rice. The term "cereal" was not defined in the Act and was taken in its ordinary sense as a grain used for food. Soyabean was held to be capable of use as food, and its character as an oil-seed did not exclude it from the category of grain for the purpose of the notification. Reference to section 14 of the Central Sales Tax Act was held to be unjustified for construing the exemption notification issued under the State Act.

Conclusion: Husk of soyabean was covered by the notification and was exempt from tax. The question was answered in the negative and in favour of the assessee.

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