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tioned in Annexure II shall not be entitled to the benefit of exemption from
payment of tax or reduction in rate of tax. Presumably, the State did not de-
sire further growth of such industries by suffering loss of revenue. What is
however necessary to note is that Annexure II is an exclusionary part of exemption
notification. The High Court did not examine the issue from this angle and also
failed to appreciate that exclusionary part of an exemption notification has to be
construed rather Strictly. Even though the word used in exclusionary part of an
exemption notification has a wide dictionary meaning or connotation, only that
meaning should be given to It which would achieve rather than frustrate the object
of granting exemption and which does not lead to uncertainty or unintended re-
sults.
11. A correct reading of the notification further discloses that the words
‘commodities of like nature’ in Entry 18 were meant to include commodi-
ties other than those specifically mentioned. What they, indicate is that oth-
er commodities of like nature also were not to get benefit of the exemption.
To that extent they did widen the scope of the Entry but they cannot be
construed to have the effect of enlarging the meaning of the word ‘sweet-
meat’. As that was not the purpose of including those words in the Entry
the High Court was not justified in holding that they gave an unlimited and
unrestricted meaning to the word ‘Mithai’ or ‘sweetmeat’.
12. The High Court has also not correctly 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 under-
stood in India and more particularly in the State of U.P. As held by this Court in
Collector of Central Excise v. M/s. Parle Exports (P) Ltd. (1989) 1 SCC 345 “The
words used in the provision, imposing taxes or granting exemption should be un-
derstood 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 preparations in terms of
Central Excise Notification No. 55/75, dated 1-3-1975. 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 for-
eign 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 particu-
larly 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 dealers in toffees or by the con-
sumers. On the other hand, evidence was led by the Appellant in C.A. No. 1692 of
1997 indicating that toffee is not considered as sweetmeat, that they are not sold in
shops selling sweetmeats but are sold in shops selling confectioneries or other types
of goods, and that the consumers do not buy toffees as sweetmeat or treat them as
such. It was, however, contended by the learned counsel for the State that sometime
before this exemption notification was issued by the State, the Allahabad High
Court had in two cases held that toffee is a sweetmeat. But it was so held in
a different context and no evidence was led by the State to show that there-
after, the dealers in toffees and consumers started treating them as sweet-
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