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TMI Blog1998 (10) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... y 27, 1991, issued by the State of Uttar Pradesh, in exercise of its powers under section 4-A of the Uttar Pradesh Sales Tax Act, 1948 (for short, "the Act"). 2.. With a view to step up economic growth by promoting development of certain industries in the State, the U.P. State Government decided to grant exemption from payment of sales tax to new industrial units and to units undertaking expansion, diversification or modernization. To achieve that object, it issued a notification on July 27, 1991 under section 4-A of the Act. For ready reference, we quote below the relevant 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 ty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, for an eligibility certificate. The Joint Director rejected the application on the ground that toffee is "sweetmeat" and, therefore, the appellant's new industrial unit being a unit of the type mentioned in annexure II to the notification was not entitled to the exemption. Aggrieved by that rejection, the appellant preferred an appeal to the Trade Tax Tribunal, U.P. It was dismissed as the Tribunal agreed with the view of the Joint Director. The appellant then filed a revision petition in the Allahabad High Court but that was also dismissed. Hence, C.A. No. 9282 of 1995 by it after obtaining special leave. 4.. M/s. Rose Garden Confectionery Pvt. Ltd., appellant in C.A. No. 1692 of 1997 also established a new industrial unit for manufacturing toffees, by making substantial capital investment. It commenced production on April 1, 1993. On August 17, 1993, 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 appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the English-Hindi Dictionary of Dr. Komil Bulkey, the meaning of the word 'confectionery' is given as misthan, mithai and sweetmeat has been described to mean as murabba, misthan, mithai. Thus, according to the dictionaries, mithai is synonymous with 'sweetmeat' in English and that is why the English translation of the aforesaid notification correctly uses 'sweetmeat' as the English version of 'mithai'. There is no doubt that a toffee is a sweetmeat, as understood by the people where toffee originated. The learned counsel contended that the people in India or in U.P. do not conceive a toffee as a mithai. This 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 any 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' wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ionary meanings of the words "sweetmeat" and "toffee" it should have decided the question whether "toffee" is "sweetmeat" by considering how these commodities are understood by the people in the State. 7.. It is true that dictionary meaning of the word "sweetmeat" is very wide and any food which is sweet and rich in sugar can be described as "sweetmeat". Toffee is a confection of sugar and other materials and being rich in sugar would be "sweetmeat" in its wider sense. But for deciding whether toffee is "sweetmeat" as contemplated by the exemption notification, what is required to be considered is the object of the notification and the context in which that word is used in the notification. 8.. 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 make 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied the popular parlance test. As can be seen from the observations made by it that "there is no doubt that a toffee is a sweetmeat, as understood by the people where toffee originated" and that "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 High Court preferred to decide the issue by relying upon how toffee is understood 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 Central Excise v. Parle Exports (P) Ltd. [1989] 75 STC 105; (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f more than one interpretation. In support of his contention, he relied upon the decisions of this Court in State of Bihar v. S.K. Roy [1966] Supp. SCR 259 and Jogendra Nath Naskar v. Commissioner of Income-tax [1969] 3 SCR 742. In Naskar's case [1969] 3 SCR 742, this Court quoted with approval the following observations made in Cape Brandy Syndicate v. Inland Revenue Commissioners [1921] 2 KB 403: "I think it is clearly established in Attorney General v. Clarkson (1900) 1 QB 156 at pages 163, 164 that subsequent legislation may be looked at in order to see the proper construction to be put upon an earlier Act where that earlier Act is ambiguous. I quite 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." 13.. 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 Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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