Broad construction of "paper and pulp" covered strawboard, defeating concessional tax relief for the assessee.

The Supreme Court construed the Schedule expression "paper and pulp" broadly for industrial tax incentive purposes and held that strawboard fell within that industry. It relied on the industrial licence, the inclusion of strawboard and paperboard in the relevant industrial classification, and the similarity of the manufacturing process to paper production. Applying the rule that tax incentive provisions for industrial development receive a liberal construction, the Court upheld the Revenue's position and denied the assessee concessional tax treatment and relief under section 80-E.

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Issues: Whether strawboard manufacture fell within the expression "paper and pulp" in the relevant Schedule entries so as to entitle the assessee to concessional tax treatment and relief under section 80-E.

Analysis: The Schedule entries were intended to identify industries eligible for incentive taxation, and the expression "paper and pulp" was construed as referring to the paper and pulp industry broadly. On the material before it, the Court held that strawboard formed part of that industry. It relied on the industrial licence, the inclusion of strawboard and paperboard in the relevant industrial classification, and the identity of the manufacturing process with paper manufacture. The Court further applied the principle that provisions granting tax incentives for industrial development must receive a liberal construction.

Conclusion: Strawboard was covered by "paper and pulp", and the assessee was not entitled to succeed; the Revenue's position was upheld.

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