Strict construction of exemption notifications barred turnover tax relief for chemical fertilizer mixtures; binding precedent had to be followed.

Exemption notifications must be construed strictly on their plain language, so a turnover tax exemption for chemical fertilizers could not be extended by interpretation to chemical fertilizer mixtures. The scheme of entry 11 in the Second Schedule treated fertilizers and fertilizer mixtures as distinct commercial commodities, and the earlier binding decision had already read the same notification as excluding mixtures. A co-ordinate forum cannot disregard that precedent on the ground of per incuriam; the proper course is reference to a larger Bench. The Tribunal therefore erred in declining to follow the binding decision and in setting aside the reassessment orders.

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Issues: Whether the exemption from turnover tax on chemical fertilizers could be extended to chemical fertilizer mixtures and whether the Tribunal was justified in declining to follow the earlier binding decision on the same notification.

Analysis: The notification exempted only chemical fertilizers simpliciter from turnover tax under section 6B of the Karnataka Sales Tax Act, 1957. The scheme of entry 11 in the Second Schedule treated chemical fertilizers and chemical fertilizer mixtures as distinct categories, and the earlier decision had already construed the same notification to exclude mixtures. An exemption notification must be construed strictly on its plain language, and the Court reiterated that a co-ordinate forum cannot disregard a binding precedent on the ground that it is per incuriam; the proper course is to seek reference to a larger Bench. Chemical fertilizer mixture is a different commercial commodity and the notification could not be expanded by interpretation to cover it.

Conclusion: The exemption did not extend to chemical fertilizer mixtures, and the Tribunal erred in ignoring the binding precedent and in setting aside the reassessment orders.

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