Waste paper treated as paper for entry tax exemption under a purposive interpretation of the exemption entry.

Waste paper used as raw material for manufacturing paper was held to fall within the expression "paper" in Explanation II to Entry 16-B of the Karnataka Tax on Entry of Goods Act, 1979, so the exemption from entry tax applied. The Court read the exemption provision in its ordinary and purposive sense, holding that taxing words must be construed to advance the object of the entry and that no unstated distinction between paper and waste paper could be imported when the Legislature had not expressly made one. On that interpretation, the assessments and appellate orders were set aside.

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Issues: Whether waste paper, when purchased locally and sold to industrial units for manufacture of paper, falls within the expression "paper" in Explanation II to Entry 16-B of the Schedule to the Karnataka Tax on Entry of Goods Act, 1979, so as to qualify for exemption from entry tax.

Analysis: Entry 16-B grants exemption for raw materials, component parts and inputs used in the manufacture of an intermediate or finished product, while Explanation II excludes certain items from that category but mentions "paper" and not "waste paper". The expression "paper" was construed in its ordinary and practical sense, and the Court found no legislative indication that waste paper was intended to be treated as a distinct taxable commodity for this purpose. The Court applied a purposive and non-technical interpretation, emphasising that words in a taxing enactment must be read to further the object of the provision and that redundant distinctions should not be introduced where the Legislature has not expressly made them.

Conclusion: Waste paper used as raw material for manufacture of paper is covered by the exemption provision and is not liable to entry tax under Entry 16-B.

Final Conclusion: The assessments and appellate orders were set aside, and the petitions were allowed.

Ratio Decidendi: Where a statutory exemption refers to a commodity in general terms, the expression must be understood in its ordinary and purposive sense, and an unstated distinction between closely related commercial forms of the commodity cannot be imported to deny the exemption.

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