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TMI Blog2018 (3) TMI 1683X X X X Extracts X X X X X X X X Extracts X X X X ..... ems. One such item which they manufacture and sell is toast/rusk. 4. Schedule I of the Chhattisgarh Value Added tax Act, 2005 (hereinafter shall be referred to as "the VAT Act") enumerates a series of items which are tax-free goods or where the rate of tax is 0%. Entry 7 of the said Schedule is bread (branded or otherwise). During the course of the assessment of the petitioner-establishment for levy of tax under the VAT Act, the sale of toast from the petitioner-establishment was construed to be an item which would fall within the residuary entry under Part IV of Schedule II as the item rusk/toast has not been separately specified under Schedule I or under Part II and Part III of Schedule II and thus levied tax at the rate of 12.5 per cent. which was later revised as 14 per cent. 5. Except for W. P. T. No. 98/2013, the petitioners in all the other writ petitions had challenged the assessment before the appellate authority and the appeals preferred by them also stood rejected, leading to the filing of the present writ petitions. So far as W. P. T. No. 98 of 2013 is concerned it was filed straightaway at the first instance itself when the notice before assessment was issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under this generic term. 10. Thus, for all these contentions it was prayed by the petitioners that the impugned assessment orders and the orders passed by the appellate 10. authority be set aside so also the notice before assessment which has been issued also be quashed. The petitioners also prayed for an appropriate writ to be issued so that toast and rusk also are held to be items which would fall under the generic term of bread under entry 7 of Schedule I of the VAT Act. 11. According to the petitioner it was burden upon the respondent/State to have reached to a specific conclusion that the toast and rusk for reasons specific would not come within the generic term so as to exclude rusk and toast from entry 7 in Schedule I and to bring it under the purview of the residuary entry of Part IV under Schedule II. 12. Per contra, the State Counsel opposing the petition submits that the petition is totally misconceived and does not have any merits. That under no circumstances, can a toast or a rusk be called a bread or vice versa so as to treat all these items as one and the same bringing it under the umbrella of bread. 13. According to the State under the normal practice there are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceptions set out in the corresponding entry in the third column thereof." 17. A plain reading of section 15 of the VAT Act itself would show that all those products which are specified in Schedule I, tax shall not be payable on the sale and purchase of said products. Entry 7 of the said Schedule clearly refers to products both Bread or otherwise. Likewise, Schedule II of the said Act also envisages a list of products. What is also relevant is that the products which have been specified in Part II of Schedule II, the rate of tax levied is prescribed. Likewise, Part IV of the said Schedule II envisages that "all those goods which are not included in Schedule I, Part II and III of the said Schedule" have fixed the rate of tax at 14 per cent. The said entry in the Schedule, i.e., Part IV is normally referred to as residuary entry. 18. According to respondent-State since under Schedule I, entry 7, it is only bread which has been referred to under entry 7 in Schedule I and rusk and toast not having been expressly given in any of the entries under any of the Schedule, under such circumstances, what is required to be ascertained is whether the rusk or toast can be brought within the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rel with the proposition that construction of the word is to be adopted to the fitness of the matter of the statute. But for determining the said question, several factors which would be relevant are required to be gone into. The trade or commercial meaning or the end-user context would, thus, be a relevant factor. . . . . 56. We, therefore, are of the opinion that if there is a conflict bet ween two entries one leading to an opinion that it comes within the purview of the tariff entry and another the residuary entry, the former should be preferred." 24. In 84 STC 414 (SC) ; [1990] 1 SCC 532, in case of Bharat Forge & Press Industries (P.) Ltd. v. Collector of Central Excise, Baroda, Gujarat, the Supreme Court in paragraph 4 has held that only such goods which cannot be brought under the various specific entries in the tariff Schedule should be attempted to be brought under the residuary entry. In other words, unless the Department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort can be had to the residuary item. 25. It is also well-settled principle of law that when two views are possible, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s who use it. The burden of proving that Banphool Oil is understood by the customers as an hair oil was on the revenue. This burden is not discharged as no such proof is adduced. On the contrary we find that the oil can be used for treatment of headache, eye problem, night blindness reeling head, weak memory, hysteria, amnesia blood pressure, insomnia, etc. The dosages required are also set out on the label. The product is registered with Drug Controller and is being manufactured under a drug licence." It is settled law that the onus or burden to show that a product falls within a particular tariff item is always on the Revenue. 28. A similar view further also taken by the honourable Supreme Court in yet another decision in the case of "Puma Ayurvedic Herbal (P) Ltd. v. Commissioner, Central Excise, Nagpur reported in 145 STC 200 (SC) ; [2006] 3 SCC 266, wherein paragraph No. 8 has reiterated the aforesaid principle and held that (page 205 in 145 STC) : ". . . It is settled law that the burden of showing correct classification lies on the Revenue. . . ." If we look at the facts of the instant case there does not appear to have been any strong evidence led by the revenue befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our view, 'bread' includes and should include all forms or kinds of bread which are prepared by moistening, kneading, baking, frying or roasting meal or flour with or without the addition of yeast, leaven or any other substance for puffing or lightening the article. . . . ." 30. Again a similar matter came up for consideration before the Division Bench of the Kerala High Court in a matter which is reported in [1993] 88 STC 9 (Ker) in the case of "Modern Food Industries (India) Ltd. v. Assist- ant Commissioner (Assessment), Sales Tax, Special Circle" wherein again in a dispute between "bun" and "bread", the Division Bench of Kerala High Court dealing with the issue in paragraphs Nos. 9 and 10 held as under (page 12 in 88 STC) : "9. It is emphasised that bread is manufactured and marketed in different names and forms to suit the tastes and requirements of the consumers. 10. Further factual details about the components and the process have been given in the additional affidavit dated July 30, 1990. It is stated : 'The ingredients of bread and bun are maida, sugar, salt, fat, yeast, glycerine mono stala, vitamin premix, potassium bromate, acetic acid and calcium prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter of "Samsung India Electronics Private Limited v. Government of NCT of Delhi reported in [2017] 97 VST 417 (Delhi) in paragraphs Nos. 41 to 44 has held as under (pages 433 and 434 in 97 VST) : "41. In Commissioner of Sales Tax v. Agarwal & Co. [1983] 52 STC 117 (Bom) ; [1983] 12 ELT 116 (Bom), the question was whether 'milk' occurring in entry 36 of Schedule A of the Bombay Sales Tax Act, 1959 includes 'milk powder' as well. It was held that milk would not only include milk in liquid form but all types of milk. It was held that while looking at the words of an entry in the sales tax legislation, it was permissible to examine the legislative history of the said entry. It was pointed out that 'while interpreting a general term used for describing any commodity in any fiscal legislation, the general term so used covers that commodity or item or article in all its forms and varieties'. It was accordingly observed that 'milk in powder form can be looked upon as a result of this continually evolving technology. There is no reason why it should be excluded from the generic term "milk".' 42. In Dunlop India Ltd. v. Union of India [1983] 13 ELT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efinition of "toast and rusk" and further also taking into consideration the ingredients required for the preparation of the two products, this court has no hesitation in reaching to the conclusion that there is substantially no change in the basic physical properties used for manufacturing of bread as well as toast and rusk. It is only the manufacturing process and that too restricted to the time required for baking of the two products everything else is the same.
34. Under the factual circumstances, this court is also of the opinion that the term "bread" under Schedule I, entry 7 has to be construed as a generic entry made and it has to be given the widest interpretation that could be given, subject to the condition that the ingredients being substantially the same. Thus, this court holds that rusk and toast also would fall within entry 7 of Schedule I of the VAT Act and it cannot be considered to be one which would come under the residuary entry.
35. As a consequence, the impugned orders in all these writ petitions stand quashed/set aside with consequences to follow. Accordingly all these writ petitions stands allowed and disposed of. X X X X Extracts X X X X X X X X Extracts X X X X
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