TMI Blog2012 (10) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... e and would be taxed in residuary entry, at the rate mentioned in Section 4(1) (d) of the Delhi Sales Tax Act, 1975. Decision in THE STATE OF BOMBAY Versus VIRKUMAR GULABCHAND SHAH [1952 (5) TMI 9 - SUPREME COURT] followed. - ST.APPL. 3/2012 - - - Dated:- 5-10-2012 - MR. S. RAVINDRA BHAT MR. R.V.EASWAR JJ. Petitioner Through: Mr. Rajesh Jain, Advocate Respondent Through: Mr. Vineet Bhatia, Advocate S. RAVINDRA BHAT, J.: (OPEN COURT) 1. The present appeal questions a decision of the Appellate Tribunal, Value Added Tax, Delhi, (Tribunal, for short), dated 20.12.2011 in Appeal No. 240/ATVAT/07-08. The question urged is whether the Tribunal s decision, concluding that the appellant s fruit pulp based drink, known as Slice is correctly classifiable as a food article under Entry 47 of the First Schedule and taxable @ 12% under Section 4(1)(a) or is taxable under the residuary entry under Section 4(1)(d) of the Delhi Sales Tax Act, 1975 (Act, for short). 2. The brief facts are that the appellant, a dealer, trades in aerated drinks, mineral water and fruit pulp based drink, known as Slice . It sought to deposit sales tax, at 8%, contending that the item w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was submitted that the term food connotes an article or substance which primarily immediately nourishes the human body. 5. In this regard, learned counsel relied upon a decision in S. Samuel (supra) in terms of the New Encyclopaedia Britannica (15th edition, volume 25, Page 49) to the effect that : Functions of food: Food serves three functions in most living organisms. First, it provides materials that are metabolized either by oxidative or by fermentative processes to supply the energy required for the absorption and translocation of nutrients, for the synthesis of cell materials, for motility and locomotion, for excretion of waste products, and for all other activities of the organism. Second, food supplies the electron donors (reducing agents) required for the formation of the reduced coenzymes (enzyme components) necessary for the synthetic processes that occur within the cell. Third, food provides the materials from which all of the structural and catalytic components of the living cell can be assembled by processes sometimes called anabolism. The three roles of food are not mutually exclusive; energy-yielding substances in many organisms may funct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umption and it provides sustenance to the individual who consumes it. The counsel also relied upon the decision reported in Pepsico India Holdings Private Ltd. v. State of Assam Others [2009] 25 VST 41 (Gau) where the Court had to say that the task of construing a statute has to be based on the objectives sought to be achieved by the taxing enactment. In that case, the question which arose was whether potato chips manufactured and sold by the assessee were processed or preserved vegetables and fruits . 8. The High Court had relied upon Dunlop India Limited Madras Rubber Factory Ltd. v. Union of India 1983 (13) ELT 1566 (SC) where it was held that when an article is by all standards classifiable under a specific item in the Tariff Schedule it would be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause. 9. Learned counsel emphasized that the product in question, i.e., mango drink, in this case, corresponded closely to the entry of the food and drinks in question, i.e., food article in Entry 47 of the First Schedule, therefore, cannot be taxed under the residuary entry i.e. orphanage . It is therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is, therefore, that the Court had to address whether a mango pulp based drink, is a food article within the meaning of the expression under Entry 47 of the First Schedule. 12. During the hearing, the learned counsel for the dealer/appellant had relied upon the judgment of Gujarat High Court i.e. Gokaldas Trading co. (supra). The Court there had to deal with the Entry which reads as follows food stuff and food provisions of all kinds in the context of the malted drink Bournvita . The Court noticed the previous decision of the Supreme Court in State of Bombay v. Virkumar Gulabchand Shah 1952 AIR 335 SC where the Supreme Court had to deal with the expression food stuff . The Supreme Court had then held that the entry in question was limited to those articles which are eaten as food . More pertinently the Gujarat High Court in a previous ruling in State of Gujarat v. Sarabhai Chemicals [1971] 27 STC 170, held that if an article is normally eaten or if it can be offered as food to a normal person who is found hungry then it would be regarded as a food stuff or food provision but not otherwise. On the facts of that case, i.e., Bournvita was classified as food stuff. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sense, it includes everything that goes into the preparation of food proper (as understood in the narrow sense) to make it more palatable and digestible. In my opinion, the problem posed cannot be answered in the abstract and must be viewed in relation to its background and context. But before I dilate on this, I will examine the dictionary meaning of the words. The Oxford English Dictionary defines foodstuff as follows: that which is taken into the system to maintain life and growth and to supply waste of tissue. In Webster s international Dictionary food is defined as: nutritive material absorbed or taken into the body of an organism which serves, for purposes of growth, work or repair and for the maintenance of the vital processes. .. .. . So far as food is concerned, it can be used in a wide as well as a narrow sense and, in my opinion, must depend upon the context and background. Even in a popular sense, when one asks another have you had your food? , one means the composite preparations which normally go to constitute a meal-curry and rice, sweetmeats, pudding, cooked vegetables and so forth. One does not usually think separately of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ani Breweries (supra) the proposed question was whether beer was a food article . Considerable arguments were sought to be addressed before the Court suggesting that beer had nutritive properties and nourishes the human body. The Calcutta High Court again applied the common parlance test and held that beer was not a food article. Likewise, in S. Samuel (supra) case the question was whether the tea was a food article wherein the Supreme Court concluded that it was not. 17. From the above discussion, it is apparent that by now the applicable test which has to be adopted to judge whether an entry in a taxing statute comprehends one or other article, is the common parlance test, so articulately spelt out in Virkumar Gulabchand (supra). Consequently, the Tribunal s approach in seeking recourse to the definition under the Prevention of Food Adulteration Act, was misplaced. There is no reference under the Delhi Sales Tax Act imposing such definition. The objectives of both enactments are diverse and varied. This Court is of the opinion that the pre-dominant contents of the mango pulp drink, in this case, is water (70%). The mango pulp content is 17%. This product does not claim to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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