Strict construction of tax exemptions bars non-roller flour mills from claiming special relief and retrospective recognition.

Full exemption under the 29 August 1987 notification was confined to the specific class of roller flour mills manufacturing atta, maida and suji from wheat purchased from the Food Corporation of India; a unit not shown to use rollers in the grinding process could not claim that benefit, because exemption provisions in fiscal law must be applied strictly to the language used. The recognition certificate also could not operate from a date earlier than presentation of the application, as the governing rule made effectiveness commence on that date and allowed no wider retrospective effect except within the limited statutory mechanism.

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Issues: (i) Whether a flour mill that was not shown to be a roller flour mill could claim full exemption meant for roller flour mills manufacturing atta, maida and suji from wheat purchased from the Food Corporation of India under the notification dated 29 August 1987. (ii) Whether the recognition certificate could operate retrospectively from a date earlier than the date of presentation of the application.

Issue (i): Whether a flour mill that was not shown to be a roller flour mill could claim full exemption meant for roller flour mills manufacturing atta, maida and suji from wheat purchased from the Food Corporation of India under the notification dated 29 August 1987.

Analysis: The notification granted full exemption only to the specific class of roller flour mills mentioned in Annexure II and not to all flour mills. The essential feature of a roller flour mill is the use of rollers in the grinding process, and absent proof that the dealer's unit had rollers or that grinding was carried on by rollers, the unit could not be treated as a roller flour mill. In fiscal legislation, exemption provisions cannot be enlarged by intendment or equity, and only the clear language of the notification can be applied.

Conclusion: The claim for full exemption was not sustainable and was against the assessee.

Issue (ii): Whether the recognition certificate could operate retrospectively from a date earlier than the date of presentation of the application.

Analysis: Rule 25A(5) provides that the recognition certificate takes effect from the date of presentation of the application, with only a limited statutory mechanism for deemed continuation where delayed fee is condoned on recorded reasons. The rule does not authorize a grant of recognition from an earlier retrospective date merely on equitable considerations.

Conclusion: Retrospective operation of the recognition certificate was impermissible and was against the assessee.

Final Conclusion: The revision succeeded, the Tribunal's order was set aside, and the assessee was denied both the full exemption and retrospective recognition.

Ratio Decidendi: An exemption under a taxing notification must be confined to the exact class of dealers and goods covered by its clear language, and a recognition certificate can take effect only from the date prescribed by the governing rule unless the rule itself permits a different result.

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