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"In order to find out whether toffee is a mithai or sweetmeat or a commodity of the nature of sweetmeat, reori or gazak, as mentioned in item No.18 aforesaid, we may see what the word 'Mithai' or 'sweetmeat' indicates 'Sweetmeat' as mentioned in the Webster New Collegiate Dictionary, means "a food rich in sugar, a candy or crystallized fruit. Toffee according to the same dictionary, means candy of brittle but tender texture made by boiling sugar and butter together. Thus, a toffee is an article which is rich sugar and is a sweetmeat.

In consolidated Glossary of Technical Terms Central Hindi Directorate, Ministry of Education, Government of India (1962 Edition), 'confectionery' is defined as MISTHAN, MITHAI. In the English Hindi Dictionary of Dr. Kamil Bulkey, the meaning of the word 'confectionery' is given as Misthan, 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 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 'reort', 'gazak' and commodities of like nature to be included within item no. 18. 'Reori' is nothing but an Indian version of toffee with grains of Til embeded on its surface. The use of the words 'reori', gazak' and 'commodities of like nature' expands the scope to unlimited extent and would take within the scope of the aforesaid entry any mithai or sweetmeat irrespective of its orgin, area of popularity and shelf life etc. A toffee is, undoubtedly, a mithai or a sweetmeat and a commodity of nature like sweetmeat, reori or gazak, Exemptions are discriminatory in nature as the grant exemption to some and deny the same to others. Therefore, they should be strictly interpreted and I find no reason why toffee, mithai or sweetmeat, of foreign origin should be excluded from the scope of Entry at item No.18 while Indian things like reort, gazak, petha which have a sufficiently longer shelf-life should be denied the same benefit. It would be anomalous that a person who sets up a Unit to manufacture reori, gazak, petha etc. Should be denied the exemption while another dealer manufacturing sweets of foreign origin like toffee should be granted exemption buy excluding the commodity form the scope of Entry No.18 in an artificial or discriminatory manner.

It may be mentioned that several manufacturers of toffees and things like that sell their products describing them as sweets. We can see such things sold as parry sweets', Daurala sweets' or 'Cola sweets' at any confectioner's shop."

Learned counsel for the appellants challenged the judgment of the High Court on the ground that it has not correctly construed Entry No.18. They also submitted that the High Court has not correctly interpreted the word 'sweetmeat' as used therein and that instead of being influenced by the dictionary 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. It is true that dictionary meaning of the word 'sweetmeat' is very wide and any food which is sweet and rich in sugar 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 and the context in which that word is used in the notification.

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 in 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 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 dealers in toffees or by the consumers. 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 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 in can be said with reasonable amount of certainty that people in the this country do not consider toffee as 'mithai'. The High Court committed a have 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. The learned counsel for the appellant also drew our attention to a similar exemption notification for the subsequent period issued by the State of U.P. wherein the relevant item is worded thus: "Units making sweetmeats, namkin, reori, gazak (but excluding such confectionery manufacturing units as are registered under the Factories Act, 1948) and restaurants." The llearned counsel submitted that subsequent legislation can be looked at in order to see what is the proper interpretation to be put upon the earlier legislation when the earlier legislation is found to be obscure or ambiguous or capable or more than one interpretation. In support of his contention, he relied upon the decisions of this Court in State of Bihar vs. S.K. Roy (1966) Supp. SCR 259 and Yogender Nath Naskar v. Commissioner of Income Rax, Calcutta (1969) 3 SCR 742. In Naskar's case (supra), this Court quoted with approval the following observations made in Cape Brandy Syndicate v. I.R.C. (1921 2 K.B.403):