Common-parlance interpretation of tobacco exemption: zarda held covered where the statute did not curtail the entry.

Zarda composed predominantly of tobacco was treated as a tobacco product covered by the exemption for "tobacco and all its products" in Schedule III to the Pondicherry General Sales Tax Act, 1967. The Court applied the plain and common-parlance meaning of the exemption entry and held that a tax authority cannot read in a restriction that the statute or a valid notification does not express. Because the exemption had not been curtailed, the revisional authority had no basis to treat the appellate order as erroneous and prejudicial to revenue, and the revision was unsustainable.

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Issues: Whether zarda sold by the assessee fell within the exemption for tobacco and all its products under item 25 of Schedule III to the Pondicherry General Sales Tax Act, 1967, and whether the Secretary to Government was justified in revisional interference under section 37 of the Act.

Analysis: The assessee's product was found to consist overwhelmingly of tobacco, with the remaining ingredients serving only to make it chewable and fragrant. The exemption entry in Schedule III was not curtailed by any notification or amendment. In interpreting the exemption entry, the Court applied the plain and common parlance meaning of the expression "tobacco and all its products" and held that a tax authority cannot read into the statute a restriction not found there. Since the Appellate Assistant Commissioner had correctly applied the exemption, the revisional authority had no basis to treat that order as erroneous and prejudicial to the Revenue.

Conclusion: Zarda was held to be a tobacco product covered by the exemption, and the revisional order was unsustainable. The assessee succeeded.

Final Conclusion: The exemption granted to the assessee's turnover was restored and the assessment revision was set aside.

Ratio Decidendi: Where a taxing entry exempts tobacco and all its products, a preparation composed predominantly of tobacco must be treated as a tobacco product in common parlance unless the exemption is expressly withdrawn or curtailed by the statute or a valid notification.

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