Non-levy notification clauses must operate independently; goods with full rebate were not subject to State Development Tax.

A non-levy notification must be construed by giving independent effect to each enumerated category of goods, and cumulative conditions cannot be read into separate clauses. The Court held that goods on which full rebate of trade tax was allowed fell within clause (iii) of Notification No. 1307, so State Development Tax was not leviable. The Tribunal had wrongly treated the clauses as cumulative, and the assessee's goods were outside the tax net under the notification.

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Issues: Whether, on a proper construction of Notification No. 1307 dated 28.4.2005 issued under section 3-H(4)(d) of the U.P. Trade Tax Act, 1948, the clauses specifying categories of goods are independent of each other and whether the assessee's goods, being eligible for full rebate, were not liable to State Development Tax.

Analysis: The assessee manufactured and sold kraft paper, on which trade tax was payable at 5% and entry tax had also been deposited at the full rate. The notification under section 3-H(4)(d) specified that State Development Tax would not be leviable on goods falling within any of the stated categories, including goods on which trade tax rebate is allowed to the full extent. The Tribunal treated the four clauses as cumulative and read words of conjunction into the notification. The Court held that each clause referred to a separate category and was capable of operating independently. The assessee's case fell within clause (iii) because full rebate had been allowed on account of payment of entry tax at 5%, and the other clauses were not required to be satisfied.

Conclusion: The notification was wrongly construed by the Tribunal, and the assessee was not liable to State Development Tax under section 3-H(4)(d). The revision was allowed and the impugned order was set aside.

Ratio Decidendi: Where an exemption or non-levy notification contains separate clauses describing distinct categories of goods, each clause must be given independent effect according to its plain language, and liability cannot be imposed by reading cumulative conditions into the notification.

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