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20. Mr. Joshi then placed reliance on the decision of the Supreme Court in the case of Pappu Sweets and Biscutis vs. Commissioner of Trade Tax, U.P. Lucknow (supra). In our opinion, this decision is also no avail to the applicant. The issue which fell for consideration of the Supreme Court was as to whether the assessee was entitled for exemption from payment of sales tax under the exemption notification in respect of toffees. The issue was whether toffee is a sweetmeat or commodity of a like nature and whether the assessee's industrial unit making toffees would not be entitled for exemption. The Nalawade A.S. 23/26 STR-56-08 Supreme Court while applying the test of strict interpretation to the exemption notification observed as under :-

11. 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 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-

Nalawade A.S. 24/26 STR-56-08 alcoholic beverage bases are food products or food preparations in terms of the Central Excise Notification No.55/75 dated March 1, 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 foreign countries. The High Court, therefore, should have applied the rest 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 dealers in toffees or by the consumers. On the other hand, evidence was led by the appellant in C.A.N.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 thereafter, the dealers in toffees and consumers started treating them as sweetmeat. In the Hindi version of the notification for the word sweetmeat the word "mithai"

is used. The word "mithai" has a definite connotation and it can be said with reasonable amount of certainty that people in this country do not consider toffee as "mithai". The High Court committed a grave error in holding that as some manufacturers of toffees sell their products by describing them as sweets it can be said that in commercial circles toffee is known as sweetmeat."