Exemption notifications must be read strictly: procedural borrowing cannot create entry tax relief for existing industrial units.

An exemption notification under the Karnataka Entry Tax law was confined to new industrial units for entry tax relief on raw materials, component parts, inputs and machinery. Procedural adoption of the sales tax exemption notification did not expand that class of eligible units, because the sales tax notification separately extended benefits to existing units undertaking expansion, diversification or modernisation. Since the claimant was an existing industrial unit and not a new unit, the text of the entry tax notification did not support exemption, and the claim was held not maintainable.

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Issues: Whether an existing industrial unit, which had made investment for expansion after 1 October 1990, was entitled to exemption from entry tax under the notification issued under section 11-A of the Karnataka Tax on Entry of Goods Act, 1979.

Analysis: The entry tax notification exempted tax on entry of raw materials, component parts, inputs and machinery only for new industrial units described in the table to the notification. Though the notification adopted the procedure contemplated under the sales tax exemption notification, that adoption was only procedural and did not enlarge the class of eligible units. The sales tax notification under section 8-A of the Karnataka Sales Tax Act, 1957 contained a separate provision extending benefit to existing units making investment for expansion, diversification or modernisation, but no such substantive extension was found in the entry tax notification. The appellant was an existing unit and not a new industrial unit, so the exemption could not be claimed on that basis.

Conclusion: The claim for entry tax exemption by the existing industrial unit was not maintainable and the decision went against the assessee.

Ratio Decidendi: Where an exemption notification under a taxing statute limits relief to specified eligible units, procedural borrowing from another notification cannot be used to read into it a substantive exemption that the text does not grant.

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