सभाया यः

Operational rule vidhi

The affix यत् comes in the sense of 'excellent with regard thereto' after the word सभा .

Word by word (padaccheda)

Left context सभायाः pañcamī · ekavacanaSubstitute / term यः prathamā · ekavacana

Left context Pañcamī (5th case): "after X", the operation applies to what follows (1.1.67 तस्मादित्युत्तरस्य). Also used for limits and sources.
Substitute / term Prathamā (1st case): in operational rules, the substitute or the thing introduced; in definitions, the term or its referent.

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Full reading

सभायाः यः

Pāṇini leaves out words that carry over from earlier sūtras. Expand to see the rule as a reader actually understands it.

Commentary

The affix यत् comes in the sense of 'excellent with regard thereto' after the word सभा ।
This debars यत् the difference being in accent 3.1.3, and 6.1.185 Thus सभायां साधुः = सभ्यः꣡ 'refined' lit. fit for society.

Śrīśa Chandra Vasu, The Ashtadhyayi of Panini (1897), via ashtadhyayi.com.