Khatema Fibres Ltd vs State Of Uttar Pradesh & Anr

The Supreme Court held that craft paper, while used for packing, is still classified as paper under the U.P. Trade Tax Act, 1948, and thus does not qualify for tax exemption under Section 4-B. The Court affirmed the Full Bench decision in M/s Lalji Board Industries, emphasizing that the burden of proof lies on the claimant to demonstrate that the product is exclusively for packing. Consequently, the appeal was dismissed, upholding the cancellation of the Recognition Certificate for tax exemption.