Strict construction of exemption notifications prevents extension of relief where prescribed conditions are not fully satisfied.

An exemption notification must be construed strictly on its plain terms, and the word "and" in the entry "collection and processing of forest plants for medicinal purposes" could not be read as "or" to widen the relief. Mentha crystals made from purchased mentha oil were therefore outside the entry because the dealer did not itself collect forest plants. Mere registration or certification by the Khadi and Gramodyog Board did not conclusively establish entitlement, since the assessing authority could still verify whether every prescribed condition was actually met. On the stated facts, the exemption was unavailable and the assessment and reassessment orders were restored.

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Issues: (i) Whether entry No. 34 of Notification No. 2454 dated 5 October 1995, namely "collection and processing of forest plants for medicinal purposes", covered mentha crystals manufactured from purchased mentha oil by reading the word "and" as disjunctive. (ii) Whether the dealer could claim exemption without itself collecting the forest plants and merely on the basis of registration or certification by the Khadi and Gramodyog Board.

Issue (i): Whether entry No. 34 of Notification No. 2454 dated 5 October 1995, namely "collection and processing of forest plants for medicinal purposes", covered mentha crystals manufactured from purchased mentha oil by reading the word "and" as disjunctive.

Analysis: The exemption notification issued under section 4(c) of the U.P. Trade Tax Act, 1948 had to be construed on its plain language. The entry used the expression "collection and processing", and there was no ambiguity in the wording to justify reading "and" as "or". Exemption notifications are to be strictly complied with, and external aids cannot be used to enlarge a clear exemption entry. The facts also showed that the dealer purchased mentha oil and only processed it, rather than collecting forest plants itself.

Conclusion: The entry did not cover the dealer's product, and the benefit of exemption could not be extended on that basis.

Issue (ii): Whether the dealer could claim exemption without itself collecting the forest plants and merely on the basis of registration or certification by the Khadi and Gramodyog Board.

Analysis: The notification required satisfaction of the stated conditions, including collection and processing of forest plants for medicinal purposes. Mere certification by the Board did not make the exemption conclusive or bind the trade tax authorities, because the assessing authority retained the power and duty to examine whether the statutory conditions for exemption were actually fulfilled. On the facts, the dealer had not shown that the product was sold for medicinal purposes or that the essential conditions of the notification were met.

Conclusion: The dealer was not entitled to exemption merely on the basis of Board certification or registration.

Final Conclusion: The Tribunal had erred in granting exemption and in upsetting the remand order on an incorrect construction of the notification and on mistaken assumptions of fact. The assessment and reassessment orders were restored, and the revisions were allowed.

Ratio Decidendi: An exemption notification must be construed strictly according to its plain terms, and exemption cannot be granted unless the claimant satisfies every condition expressly prescribed by the notification.

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