Narrow construction of sugar exemption under sales tax law leaves sugar syrup taxable in intra-State transactions.

Sugar syrup was held not to fall within the exemption for "sugar" in entry 31B of the Fifth Schedule to the Karnataka Sales Tax Act, 1957. The Court treated sugar syrup as a distinct commercial commodity and read the exemption narrowly, limiting it to sugar itself rather than every form or variety of sugar. It also held that the earlier decision relied upon by the assessee, which concerned declared goods and inter-State sales, did not govern intra-State sales under the State Act. The assessment on sugar syrup was therefore upheld.

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Issues: Whether sugar syrup falls within entry 31B of the Fifth Schedule to the Karnataka Sales Tax Act, 1957 and is therefore exempt from sales tax, and whether the earlier decision relied upon by the assessee could displace the settled position.

Analysis: The Court held that the dispute was governed by the Karnataka Sales Tax Act, 1957 because the transactions were intra-State sales. The exemption in entry 31B was construed as covering "sugar" and not every form or variety of sugar. Sugar syrup was treated as a distinct commercial commodity and, on the earlier Division Bench ruling, as a form of sugar rather than sugar itself. The Court further held that the decision dealing with declared goods and inter-State sales had no application on the facts, and the issue stood covered by the earlier Karnataka decision directly addressing sugar syrup under entry 31B.

Conclusion: Sugar syrup is not exempt under entry 31B of the Fifth Schedule to the Karnataka Sales Tax Act, 1957, and the tax assessment on that commodity was upheld.

Ratio Decidendi: An exemption entry covering "sugar" does not extend to sugar syrup, because a form of sugar is not necessarily the same as sugar for sales tax exemption purposes, especially in intra-State sales governed by the State sales tax law.

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