TMI Blog2018 (12) TMI 1468X X X X Extracts X X X X X X X X Extracts X X X X ..... t other than branded, processed and packed. Thus, it is evident that if an act of process takes place in respect of the poultry, such poultry will not fall under Entry 54, since, the term 'poultry' referred to therein would certainly indicate poultry as such or live poultry and not the processed one. Therefore, if the poultry is processed, the same would certainly fall under Entry 108 of Part B of I Schedule only and not under Entry 54 of Part B of IV Schedule. Whether the admitted activities carried on by the petitioner viz., slaughtering, defeathering, cleaning and cutting the poultry would be construed as an act of processing? - Held that:- The above said activities carried on by the petitioner on the poultry, that too, with the aid of the sophisticated machineries, would certainly fall under the purview of 'processing' and consequently, supply of such chicken which undergone such process, would certainly fall under Entry 108 in Part B of I Schedule and not under Entry 54 in Part B of IV Schedule. Thus, the activities carried on by the petitioner viz., defeathering, cleaning and cutting the chicken would certainly fall under the purview of processing and co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 014-15, 2015-16 and called upon the petitioner to show cause as to why the turnovers should not be redetermined and penalty imposed by contending that the cleaning, cutting and selling of meat to the restaurants, eateries, hotels is also processed meat . The respondent has not applied his mind to understand that meat is never sold as an un-cleaned dead livestock in any butcher's shop. The dead livestock, poultry is cleaned, organs are removed, chopped into pieces and only then sold as 'meat'. Cutting and removing organs do not constitute 'processing' within the meaning of TNVAT Act. When a commodity is being assessed to tax, it is important to note whether the processing has changed the nature of commodity. d) The petitioner through their reply dated 10.04.2017 and 27.04.2017 explained that the meat supplied to the restaurants, hotels and eateries are not processed meat and thus, they are exempted from payment of VAT Act. The respondent rejected the objections and passed the impugned assessment orders. The respondent has also imposed penalty of 150%, apart from assessing difference of tax payable. Originally, the impugned orders of assessment were not served ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inder is filed by the petitioner, wherein it is stated as follows: The impugned orders were not served on the petitioner in the manner known to law so as to file a regular statutory appeal. In any case, since an important question of interpretation of law has arisen in this case, the alternate regular statutory appeal will not be efficacious. The other brands such as Nilgiris, Venki's, Suguna, Godrej, Shanti Chicken were doing the very same business of cutting and cleaning the chicken but no tax is levied on them for their business, since it is treated as exemption under Entry 15. Therefore, there is discrimination against the petitioner alone and the law is being misapplied with regard to the petitioner alone. Hence, there is a malice in law and therefore, the alternate remedy before the Statutory Tribunal is not efficacious. 5. Mr.Richardson Wilson, learned counsel for the petitioner made his submissions. A written submission is also filed on behalf of the petitioner. The sum and substance of the submissions made on behalf of the petitioner are as follows: The unprocessed meat and poultry is exempted under Section 15 of the Tamil Nadu VAT Act 2006 read with Schedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition is not maintainable, as the petitioner is having statutory appellate remedy against the impugned orders of assessment. The impugned orders were passed after complying with the principles of natural justice. The impugned orders were also served on the petitioner on 15.07.2017 and 01.08.2017 respectively. The same were received by an employer of the petitioner company with acknowledgement, after affixing the company seal. The petitioner was again served with copies of orders on 20.12.2017. Having received the same, the petitioner did not file an appeal before the Appellate Authority. Thus, the petitioner cannot invoke the extraordinary writ jurisdiction of this Court. In fact, the findings rendered in Sterling Foods vs State of Karnataka reported in AIR 1986 SC 1809 , relied on by the petitioner is in favour of the Revenue in so far as the issue involved in this case is concerned. b) On merit, it is stated that processed poultry falls under Entry 108 of Part B of Schedule I, TNVAT Act and is liable to pay tax at 5%. To attract Entry 108 of Part B of Schedule I, what is required is processing and not manufacture. The test of emergence of a new commodity is releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods would fall under Entry 54 of Part B of Schedule IV under the TNVAT Act, 2006, as claimed by the petitioner or would fall under Entry 108 of Part B of Schedule I of the said Act, as claimed by the respondent. Therefore, it is contended that since such interpretation of law is required to be done in this matter, such exercise is exclusively within the domain of this Court and therefore, this writ petition is maintainable. 9. It is true that as against the impugned orders, statutory appellate remedy is available to the petitioner. It is also true that neither the jurisdiction of the respondent is questioned nor any complaint of violation of the principles of natural justice is made. At the same time, it is to be noted that the relevant facts viz., the activities being carried out by the petitioner in bringing the subject matter goods are not disputed. Therefore, as rightly pointed out by the learned counsel for the petitioner, the only question to be answered is whether the subject matter product would fall within the purview of Entry 54 of Part B of Schedule IV or Entry 108 of Part B of Schedule I. Therefore, this Court is convinced that answer to the said question could b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Part-B of Schedule-I. 12. Therefore, based on the above facts and circumstances, this Court has to first see whether the admitted activities of slaughtering, cutting and cleaning of the poultry are to be construed as a process and consequently, based on such finding, whether the sale by the petitioner by the first method would fall under Entry 54 of Part-B of Schedule -IV or Entry 108 of Part-B of Schedule-I. 13. For the purpose of understanding the relevant provisions, they are extracted as hereunder. (i) Section 15 of the Tamil Nadu Value Added Tax Act,2006 reads as follows: Exempted sale:- Sale of goods specified in the Fourth Schedule or the goods exempted by notification by the Government by any dealer shall be exempted from tax. (ii) Entry 108 in Part-B of the First Schedule of the Tamil Nadu Value Added Tax Act, 2006, reads as follows: Goods which are taxable at the rate of 5 per cent. Sl.No. Description of goods Author's Note 108 Processed meat, poultry and fish 4% w.e.f. 1.1.2007 by Act 32 of 2006 5% w.e.f. 12.7.2011 by Act 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oultry, such poultry will not fall under Entry 54, since, as already stated supra, the term 'poultry' referred to therein would certainly indicate poultry as such or live poultry and not the processed one. Therefore, if the poultry is processed, the same would certainly fall under Entry 108 of Part B of I Schedule only and not under Entry 54 of Part B of IV Schedule. 16. Now let me consider as to whether the admitted activities carried on by the petitioner viz., slaughtering, defeathering, cleaning and cutting the poultry would be construed as an act of processing. 17. There is no dispute to the fact that the petitioner is engaged in slaughtering, defeathering, cleaning and cutting into pieces of the chicken as required. There is no dispute to the fact that for doing such activities, the petitioner has engaged sophisticated machineries, which is evident from their own website stating that the petitioner Company is utilising the latest in modern poultry processing technology in 2.5 acres of green lush property boasting a capacity of 50,000 birds per day and each bird is processed in compliance with stringent ISO, HACCP and Halal standards to provide the most hygienic p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act would also get the same benefit. As stated by this Court on several occasions, there is no equity in matters of taxation. One cannot read into a section which has not been specifically provided for and therefore, we do not agree with the submissions of the learned counsel appearing for the appellant and we are not prepared to read something in the section which has not been provided for. The judgments referred to hereinabove support the view which we have expressed here. Therefore, it is clear that the benefit given to the petitioner under Entry 54 of Part B of Schedule IV has to be confined only in respect of such of those goods specifically referred to therein and not to the other clause of goods, which does not find a place under such entry. 20. Learned counsel for the petitioner heavily relied on the following case laws in support of his contention that cutting and cleaning cannot be construed as processing the chicken. Let me consider the case laws cited on behalf of the petitioner one by one. a) The first decision is reported in [1985] 58 STC 15, The State of Tamilnadu vs Eastern Acquatic Traders. It is a decision of the Division Bench of this Court. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the shrimps, prawns and lobsters therein did not lose the original character and identity when they are subjected to processing for the purpose of export and they remained the same goods and hence, the purchase of raw shrimps, prawns and lobsters must be held to be purchase in the course of export and exempt from liability of tax. Thus, from the above facts and circumstances, it is seen that the issue involved in Sterling Foods' case as well as the case before the Division Bench of this Court in Eastern Acquatic Traders' case, is one and the same arising out of Section 5(3) of the Central Sales Tax Act. Here again, the Apex Court has recorded that shrimps, prawns and lobsters have undergone the process of cutting, peeling, deveining, cleaning and freezing. Therefore, it is evident that those activities are undoubtedly to be held as processing the goods. Under such circumstances, the above decision of the Apex Court is also not helping the petitioner in any manner. c) The next decision relied on by the petitioner is reported in AIR 1980 SC 1227, Deputy Commissioner of Sales Tax (Law) vs Pio Food Packers . In that case, the question before the Apex Court was that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commodity as raw shrimps, prawns and lobsters. The argument was that when the State legislature itself made a distinction between these categories of commodities by making purchases of one category amenable to sales tax under Entry 13-a and leaving out of the scope of taxation under Entry 13-a the other category, how could it be said that both these categories represent the same commodity and there is no difference in character and identity between the two. This argument, we are afraid, is not well founded. It is based on a total misapprehension in regard to the true object and intendment of entry 13-a and it erroneously seeks to project that entry in the interpretation and application of Section 5 sub-section (3) of the Central Sales Tax Act. In fact Entry 13-a as amended, supports the argument that even processed or frozen shrimps, prawns and lobsters are known commercially and in the trade as shrimps, prawns and lobsters . It is because Entry 13-a as it stood prior to its amendment, would have, on the plain natural meaning of the expression shrimps, prawns and lobsters , included processed and frozen shrimps, prawns and lobsters, that it became necessary for the State legisla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x. 9. Here in the present case, it was not disputed on behalf of revenue that the purchases of raw shrimps, prawns and lobsters were made by the appellants for the purpose of fulfilling existing contracts for export and after making such purchases the appellants subjected raw shrimps, prawns and lobsters purchased by them to the process of cutting of heads and tails, peeling, deveining, cleaning and freezing and exported such processed and frozen shrimps, prawns and lobsters in fulfilment of the contracts for export. The only argument raised on behalf of revenue was that the goods which were exported were not the same as the goods purchased by the appellants because raw shrimps, prawns and lobsters after processing ceased to be the same commodity and became a new distinct commodity. But, for reasons which we have already discussed, this argument cannot be sustained. The shrimps, prawns and lobsters purchased by the appellants did not lose their original character and identity when they were subjected to processing for the purpose of export. So far as commercial parlance or popular usage is concerned, they remained the same goods and hence the purchases of raw shrimps, praw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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