1976 (10) TMI 156 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the term "cooked food" under Section 3(1)(a) of the Rajasthan Sales Tax Act, 1954.

Analysis:
The judgment involves a dispute regarding the classification of biscuits as "cooked food" under the Rajasthan Sales Tax Act, 1954. The Assistant Commercial Taxes Officer contended that biscuits should be classified as cooked food, falling under Section 3(1)(a) of the Act, thereby making the dealers liable to pay tax on their turnover exceeding a certain threshold. The Board of Revenue held that both bread and biscuits are considered cooked food. However, the Revenue challenged this classification, arguing that biscuits do not qualify as "cooked food" based on a judgment from the Madhya Pradesh High Court. The Madhya Pradesh High Court had defined "cooked food" as items consumed at regular meal hours, excluding items like biscuits.

The court analyzed the term "cooked food" in detail, emphasizing that the term should not be narrowly construed to include only items consumed at regular meal times. The court observed that biscuits are indeed consumed as a meal by certain segments of the population, including children from poorer backgrounds. The court also highlighted the process of baking involved in making biscuits, which qualifies as a form of cooking. The court disagreed with the Madhya Pradesh High Court's interpretation and concluded that biscuits should be considered as cooked food, especially given their preparation through baking.

Furthermore, the court distinguished the present case from the Madhya Pradesh judgment by noting that the Rajasthan Sales Tax Act's Section 3 serves as a charging section, categorizing dealers based on their taxable turnover. The court highlighted that biscuits fulfill the criteria of being cooked food as they undergo a baking process, are considered an article of food, and meet the definition of "cooked" according to various dictionaries. The court also referenced a Commissioner's notification regarding bread, which clarified that bread preparation constitutes manufacturing of cooked food, providing additional support for considering biscuits as cooked food.

In conclusion, the court rejected the applications under Section 15(3A) of the Rajasthan Sales Tax Act, upholding the classification of biscuits as cooked food and affirming the dealers' liability to pay tax based on their turnover exceeding the specified threshold. The court relied on the Commissioner's interpretation and the inherent characteristics of biscuits to determine that they should be categorized as cooked food for tax purposes.