Strict construction of exemption notifications limited cereal processing relief to the State schedule, not the broader Central Sales Tax classification.

An exemption notification for processing cereals and pulses was construed strictly in the context of the Andhra Pradesh General Sales Tax Act, 1957. Because the notification did not define "cereals," the Court read the term by reference to entry 20 of the Third Schedule rather than the broader list in section 14 of the Central Sales Tax Act, 1956. The wider Central Sales Tax classification did not enlarge the scope of the State exemption, since the State Act treated cereals differently for tax purposes. The exemption was therefore limited to cereals within the State Schedule, and the revisional order was upheld.

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Issues: Whether the exemption granted under the Government Order applied to the appellant's processing activity, and whether the expression "cereals" in the notification had to be read broadly with reference to section 14 of the Central Sales Tax Act, 1956 or narrowly with reference to entry 20 of the Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957.

Analysis: The notification exempted processing of cereals and pulses by specified industrial units, but it did not define the expression "cereals". The Court held that the notification had to be understood in the context of the Andhra Pradesh General Sales Tax Act, 1957 and the classification adopted in its Third Schedule. Although section 14 of the Central Sales Tax Act, 1956 enumerates ten items as cereals for the purpose of declared goods, the State Act itself treats different cereals differently for tax purposes and does not tax them uniformly. The exemption was therefore confined to cereals falling within the meaning attributable to entry 20 of the Third Schedule, and could not be extended to all items listed in section 14 of the Central Sales Tax Act, 1956.

Conclusion: The exemption did not apply to the appellant beyond the cereals covered by entry 20 of the Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957, and the revisional order was upheld.

Final Conclusion: The special appeals failed because the exemption notification was construed narrowly and the appellant could not claim a wider tax exemption on the basis of the broader classification of cereals under the Central Sales Tax Act, 1956.

Ratio Decidendi: An exemption notification must be construed strictly and in the statutory context in which it is issued; where the governing State statute classifies goods differently, a broader classification in another enactment does not enlarge the scope of the exemption unless the notification expressly so provides.

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