M/S. KHATEMA FIBRES LTD. vs STATE OF U.P.

The Supreme Court held that craft paper, as manufactured by the appellants, is classified as paper and not as packing material under the U.P. Trade Tax Act, 1948, specifically referencing Section 4-B. The Court affirmed the High Court's decision based on the Full Bench ruling in M/s Lalji Board Industries, which established that the common parlance meaning of 'paper' includes craft paper, thus denying the appellants' claim for tax exemption. Consequently, the Recognition Certificate was deemed invalid as the craft paper did not meet the criteria for packing material.