Minor forest produce exemption under VAT notifications extends to tendu leaves, limiting tax to the reduced rate.

Section 15-B of the Chhattisgarh Value Added Tax Act, 2005 allows the State Government to grant exemption or reduction in tax by notification, while Section 8 taxes Schedule II goods at the rate specified against each entry. The text explains that the relevant notifications covered the generic class of "minor forest produce" and did not exclude tendu leaves. On that construction, the expression was treated as including all minor forest produce otherwise taxable under Schedule II, and where competing interpretations were possible, the view favourable to the assessee was preferred. The stated effect was that tendu leaves attracted VAT only at the reduced rate of 5% rather than the higher schedule rate.

---

---

Issues: Whether tendu leaves, being minor forest produce, were covered by the exemption notifications issued under Section 15-B of the Chhattisgarh Value Added Tax Act, 2005 so as to attract tax only at the reduced rate of 5% and not at the rate prescribed against the specific schedule entry.

Analysis: Section 8 of the Act levies tax on goods specified in Schedule II at the rate mentioned against the corresponding entry, while Section 15-B empowers the State Government to grant exemption or reduction in tax by notification. The notifications in question were issued for the generic class of "minor forest produce" and contained no exclusion for tendu leaves. The schedule did not separately enumerate "minor forest produce" as a taxable class, though it contained specific entries for certain items that are minor forest produce. On a construction of the notifications on their own terms, the generic expression used therein was held to include all minor forest produce that were otherwise exigible to tax under Schedule II. In case of competing views, the construction favourable to the assessee was adopted.

Conclusion: Tendu leaves were held to fall within the exemption notifications issued under Section 15-B, and the petitioners were liable to pay VAT only at the reduced rate of 5%.

---