Industrial incentive exemption turns on purposive construction, binding eligibility certificates, and manufacture of commercially distinct goods.

Sales tax exemption under an industrial incentive scheme is interpreted harmoniously with the underlying policy, and a later notification implementing that policy should not be read to narrow the promised benefit without clear language. An eligibility certificate issued by the competent industrial authority is binding on the tax authorities for matters within that authority's domain, and the assessment officer cannot contradict the certified eligibility. The phrase "goods manufactured" is construed in context to cover the output of the eligible unit where the process yields a commercially distinct product. Blending, purification and high-speed packaging of tea can amount to manufacture where the end product acquires a different commercial identity and market character, supporting exemption.

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Issues: (i) Whether the sales tax authorities could disregard the eligibility certificate issued by the competent industrial authority and deny exemption. (ii) Whether the expression "goods manufactured" in the exemption notification had to be construed as the "output" or "goods produced" by the new industrial unit. (iii) Whether the blended and packaged tea produced by the unit amounted to a manufactured product entitled to exemption.

Issue (i): Whether the sales tax authorities could disregard the eligibility certificate issued by the competent industrial authority and deny exemption.

Analysis: The eligibility certificate was issued by the competent authority under the notification and certified the unit as eligible for exemption. The assessment authorities were bound by that certificate on matters committed to the industrial department and could not sit in appeal over it or contradict its factual determination.

Conclusion: The sales tax authorities could not ignore the eligibility certificate on matters of eligibility certified by the competent authority.

Issue (ii): Whether the expression "goods manufactured" in the exemption notification had to be construed as the "output" or "goods produced" by the new industrial unit.

Analysis: The industrial policy notified by the State promised incentives on the sale of output of eligible units, and the later exemption notification was intended only to implement that policy. There was no material showing a policy shift narrowing the benefit. In that setting, the later phrase was treated as a drafting slip and had to receive a construction consistent with the original policy and object of the scheme.

Conclusion: The words "goods manufactured" were construed as referring to the output or goods produced by the eligible industrial unit.

Issue (iii): Whether the blended and packaged tea produced by the unit amounted to a manufactured product entitled to exemption.

Analysis: The unit carried out mechanical blending, removal of impurities, and high-speed packaging, resulting in a product with value addition, a distinct commercial identity, and different market characteristics. Applying the accepted test of manufacture, the final packaged tea was treated as a commercially distinct article emerging from the process undertaken in the unit.

Conclusion: The packaged blended tea was a manufactured product for the purpose of the exemption notification and qualified for sales tax exemption.

Final Conclusion: The exemption claimed by the unit was upheld, the Tribunal's order was set aside, and the revision petition succeeded.

Ratio Decidendi: Where an industrial policy notification promises exemption on the output of eligible units, a later exemption notification implementing that policy must be construed purposively and harmoniously, and a product emerging from a process that yields a commercially distinct commodity is to be treated as manufactured for the purpose of the exemption.

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