1983 (3) TMI 245 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the term "bread" under entry 8 of the First Schedule to the M.P. General Sales Tax Act, 1958.

Analysis:
The case involved a reference under section 44(1) of the M.P. General Sales Tax Act, 1958 regarding the exemption of "chapati" and "tanduri roti" from sales tax under entry 8 of the First Schedule. The assessee, a restaurant owner, contended that these items fell under the term "bread" in the entry. The assessing authority disagreed, stating that only "bread" or "double roti" were exempt. The appellate authority and the Appellate Assistant Commissioner upheld this view. However, the Tribunal ruled in favor of the assessee, considering "chapati" and "tanduri roti" as part of the term "bread" in entry 8.

The key question revolved around the interpretation of the term "bread" in entry 8 of the First Schedule. The Madhya Pradesh General Sales Tax (Amendment) Act, 1978 substituted "double roti" for "bread" in this entry. Since "bread" was not defined in the Act, it was to be construed in its popular sense. The High Court noted that "bread" in common parlance referred to "double roti" as understood by those in the trade. The Court highlighted that while some High Courts interpreted "bread" to include "rotis" or "tanduri rotis," the change in language in the amending Act indicated a specific intention.

Citing the principle that subsequent legislation can aid in interpreting earlier Acts, the Court held that "chapati" and "tanduri roti" could not be considered as "bread" under entry 8 of the Act. The judgment emphasized that the term "bread" should be understood in its popular sense, which aligned with the legislative intent behind the amendment. Consequently, the reference was answered in favor of the revenue department, and each party was directed to bear their own costs.