Distinct taxable commodity rule: sugar-candy remained liable to sales tax despite the exemption for sugar.

Sugar-candy was treated as a distinct commercial commodity for sales tax purposes where the Orissa notifications separately placed it in the taxable schedule, even though sugar itself enjoyed exemption by reference to Item 1 of the First Schedule to the Central Excises and Salt Act, 1944. The separation of sugar and sugar-candy in different lists showed legislative intent to tax them differently, and the fact that sugar-candy is derived from sugar did not extend the exemption to it. The assessee's challenge therefore failed and sugar-candy remained liable to tax under the relevant entry for the assessment period.

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Issues: Whether sugar-candy, though claimed to fall within the exemption for sugar, was separately taxable under the Orissa sales tax notifications applicable during the relevant period.

Analysis: The exemption for sugar was linked to the definition in Item 1 of the First Schedule to the Central Excises and Salt Act, 1944, but the relevant Orissa sales tax scheme separately placed sugar-candy in the taxable list during the period in question. The Court treated the separate specification of sugar and sugar-candy in different lists as showing a legislative intention to classify them as distinct commercial commodities. It distinguished earlier authorities decided before sugar-candy was separately included in the taxable list and relied on the principle that the legislature may tax different commercial commodities differently even if one is derived from the other.

Conclusion: Sugar-candy was held liable to sales tax under the relevant taxable entry, and the assessee's challenge failed.

Final Conclusion: The petition was rejected because sugar-candy was treated as a distinct taxable commodity and not as exempt sugar for the relevant assessment period.

Ratio Decidendi: Where a commodity is separately specified in the taxable schedule, it is to be treated as a distinct commercial commodity for sales tax purposes notwithstanding that it may be derived from an exempt commodity.

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