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TMI Blog1998 (10) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... vant part of that notification. Whereas the State Government is of the opinion that for promoting the development of certain industries in the State it is necessary to grant exemption from or reduction in rate of tax to new units and also to units which have undertaken expansion, diversification or modernization: Now Therefore, in exercise of the powers under section 4-A of the Uttar Pradesh Sales Tax Act, 1948 (U.P. Act No. XV of 1948), hereinafter referred to as the Act the Governor is pleased to declare that :- 1(A) in respect of any goods manufactured in a 'new unit' other than the units of the type mentioned in Annexure II established in the areas mentioned in column 2 of Annexure 1, the 'date of starting production; whereof falls on or after first day of April, 1990 but not later than 31st day of March, 1995, on tax shall be payable, or, as the case may be, the tax shall be payable at the reduced rates, as specified in column 4 of Annexure 1, by the manufacturer thereof on the turnover of sales of such goods, ........................ ........................ 1(B) in respect of any goods manufactured in a unit other than the units of the type mentioned in Ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring toffees, by making substantial capital investment. It commenced production on 1.4.93. On 17.8.93, it applied to the General Manager, District Industries Centre, Fatehpur, U.P. for an eligibility certificate. The application was referred to the Joint Director who refused to grant it on the ground that toffee is 'sweetmeat' and units manufacturing sweetmeats are specifically excluded by the exemption Notification. The appellant's appeal to the Trade Tax Tribunal and its revision application to the High Court were dismissed. It, has therefore, filed appeal after obtaining special leave. As the question raised in both the appeals is common, they are heard together and disposed of by this common judgement. The High Court while interpreting the word 'sweetmeat' in the entry at Sl.No.18 of the list of excluded industries contained in the notification, took into consideration: (1) the dictionary meanings of the words 'sweetmeat', 'confectionery' and 'toffee'; (ii) how toffee is understood in commercial parlance; (iii) enlarged scope of Entry No.18 as indicated by the words 'commodities of like nature'; (iv) possibility of discrimi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s may be so in respect of some people. The law of Sales Tax is of general application and is equally applicable to sweetmeat, mithai of nay region whatsoever. Toffee and other things of that nature are of foreign origin and are sweets or sweetmeat according to those people and their nature cannot be changed simply because their origin is different from what is usually conveyed by the word 'mithai' in this part of the country. The word mithai' is a generic word which does not mean only 'mithai' sold in U.P. and consumed by the people here. A 'Mithai' will remain a 'mithai' whether its origin is English or Chinese or of any other foreign country and it will remain, to be a mithai even if some people in this State do not understand it to be so. The act is meant to cover commercial transactions and is not restricted to the sense of any particular class of people residing in the State of Uttar Pradesh. Then, the notification does not stop at the word 'mithai' or 'sweetmeat' only. It explains that the scope of the word is unlimited and is not restricted to 'mithais' and 'sweetmeats' of any particular region. It mentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciding whether toffee is 'sweetmeat' as contemplated by the exemption Notification and the context in which that word is used in the notification. A close reading of the Notification discloses that the State intended to give benefit of exemption or reduction in rate to these new industrial units and existing units undertaking expansion, diversification or modernization which were to male substantial capital investment. Paragraph 2 of the Notification prescribing conditions of having a licence or a letter of intent and of owning land or building or taking them on lease for a period of not less than 15 years and paragraph 3 prescribing fixed capital investment consisting of land, building, plant, machinery, equipment and apparatus are indicative of that intention. The items mentioned therein viz, 'sweetmeat', 'namkeen', and 'gazak' are usually prepared by shopkeepers and restaurants for selling them to their consumer - customers. They are not manufactured in factories having plants and machinery. The notification further discloses that the object of declaring exemption from payment of sales tax was to increase industrial activity. Within the State by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od by the people of the country where it originated rather than by considering how 'toffee' is understood in India and more particularly in the State of U.P. As held by this Court in Collector of Excise vs. M/s Parle Exports (P) Ltd. (1989) 1 SCC 345 "The words used in the provision, imposing taxes or granting exemption should be understood in the same way for which they are understood in ordinary parlance in the area in which the law is in force or by the people who ordinarily deal with them. "In that case, the question that had arisen for consideration was whether non-alcoholic beverage bases are food products or food preparation in terms of Central Excise Notification No.55/75 dated 1.3.75. This Court observed that non-alcoholic beverages are not understood in India as food products or food preparations, though they might have been regarded as such in foreign countries. The High Court, therefore, should have applied the test of popular parlance by finding out how toffee is understood in the country and more particularly in the State of U.P. No evidence was led by the State to substantiate its case that 'toffee' is considered as sweetmeat either by the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction to be put upon an earlier Act where that earlier Act is ambiguous. I quit agree that subsequent legislation if it proceeded on an erroneous construction of previous legislation cannot alter that previous legislation; but if there be any ambiguity in the earlier legislation, then the subsequent legislation may fix the proper interpretation which is to be put upon the earlier Act." For the aforesaid reasons we are of the view that the High Court has not correctly interpreted and construed Entry No.18 of the notification. Considering the object of the notification and the intention of the State Government in granting exemption from payment of sales tax and applying the correct principles of interpretation in such cases, we hold that the word 'sweetmeat' and the words "commodities of like nature" as used in the Notification dated 27.7.91 did not include within their sweep toffees manufactured by industrial units as contemplated by the notification and the Joint Director of Industries, the Tribunal and the High Court were working in taking a contrary view. We, therefore, allow both these appeals, set aside the judgments and orders passed by the High c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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