Classification of extra neutral alcohol depends on its true character, not merely its purified or concentrated form.

Extra neutral alcohol was considered in relation to whether it remained rectified spirit or other alcohol for purposes of rebate under a tax notification linked to the 1939 sales tax regime. The court noted that the relevant question was the product's true character, not merely its physical form, and that rectified spirit may be concentrated, diluted, purified or unpurified while retaining its essential identity. Because the authorities had denied relief without a proper enquiry into the actual nature of the product, the conclusion that extra neutral alcohol fell outside rectified spirit could not stand. The matter was remitted for fresh consideration on proper factual determination.

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Issues: Whether extra neutral alcohol was rectified spirit or alcohol within the meaning of the United Provinces Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939, so as to qualify for rebate under the notification issued under section 5 of the U.P. Trade Tax Act, 1948.

Analysis: The rebate notification applied only where the goods sold were spirits or spirituous liquors liable to tax under the 1939 Act. The central question was therefore whether extra neutral alcohol, claimed to be purified rectified spirit containing a high percentage of alcohol and not fit for human consumption, retained the character of rectified spirit. The authorities below had denied relief on the premise that extra neutral alcohol was a different product because its physical properties differed from alcohol or spirit. That approach was found to be unsatisfactory because rectified spirit may be concentrated, diluted, purified or unpurified and yet remain rectified spirit if it retains its essential characteristics. No proper enquiry had been made into the actual nature of the product and whether it ceased to be rectified spirit.

Conclusion: The finding that extra neutral alcohol was outside the category of rectified spirit could not be sustained. The matter required fresh consideration on proper enquiry, and the matter was remitted for a fresh decision.

Ratio Decidendi: A product claiming to be rectified spirit cannot be excluded from that category merely because it is in a purified or concentrated form; its true character must be determined on proper factual enquiry before denying tax rebate dependent on that classification.

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