1961 (7) TMI 55 - SC - VAT and Sales Tax

Whether the expression cooked food used in certain notifications issued under the U.P. Sales Tax Act 1948 (U.P. Act 15 of 1948) can be construed as including within its meaning biscuits also? Held that - Appeal dismissed. The High Court of Allahabad has in an earlier case in Commissioner of Sales Tax v. Jassu Ram Bakery Dealer 1976 (8) TMI 131 - ALLAHABAD HIGH COURT held that biscuit was not cooked food. The High Court of Madhya Pradesh has also taken the same view in Commissioner of Sales Tax Madhya Pradesh v. Shri Ballabhdas Ishwardas 1965 (4) TMI 104 - MADHYA PRADESH HIGH COURT thus we approve of the views expressed in the aforesaid decisions.

Summary

Issues:
Interpretation of the term "cooked food" in notifications under the U.P. Sales Tax Act, 1948.

Analysis:
The case involved a dispute regarding whether the term "cooked food" in notifications under the U.P. Sales Tax Act, 1948, includes biscuits. The appellant, a firm engaged in the manufacture and sale of biscuits, claimed that biscuits should be considered cooked food and taxed accordingly. The assessing authority, however, rejected this claim and imposed a higher tax rate on biscuits. The appellant appealed this decision, arguing that biscuits, being consumed for nourishment and prepared through a cooking process like baking, should be classified as cooked food. The Court considered the ordinary meaning of the term "cooked food" and the context of the notifications. It noted that while biscuits may be consumed with tea, they are not typically considered cooked food. The Court referred to previous decisions where biscuits were not classified as cooked food and upheld those views. The Court emphasized that the Hindi version of the notification used the term "pakaya hua bhojan," further supporting the interpretation that biscuits are not included in the definition of cooked food.

The Court applied the principle that tax laws should be interpreted based on ordinary understanding in the relevant area. It cited a case involving the interpretation of the term "food" to highlight the importance of context in defining such terms. The Court also referenced previous decisions where biscuits were not categorized as cooked food. It concluded that while biscuits may have a broad interpretation under cooked food, in the specific context of the notifications, they do not fall under that category. The Court affirmed the decisions of the High Courts of Allahabad and Madhya Pradesh, which also held that biscuits are not considered cooked food. As a result, the Court dismissed the appeal, stating that there was no justification to interfere with the lower court's decisions.

In summary, the Supreme Court clarified that the term "cooked food" in the notifications under the U.P. Sales Tax Act, 1948, does not encompass biscuits. The Court relied on the ordinary understanding of the term, the context of the notifications, and previous decisions to support its conclusion. The Court emphasized that while biscuits may have a broad interpretation, they are not considered cooked food within the specific framework of the notifications. The Court dismissed the appeal and upheld the decisions of the lower courts, affirming that biscuits should be taxed at a higher rate than cooked food.