1985 (8) TMI 330 - SC - VAT and Sales Tax

Supreme Court: 'Meat on hoof' qualifies as 'meat' for tax exemption.

Chiranjit Lal Anand Versus State of Assam and Another

The Supreme Court ruled in favor of the appellant in a case concerning the assessment under the Assam Sales Tax Act, 1947 on the sale of 'meat on hoof.' ... Whether 'meat on hoof' was taxable ? Held that:- Appeal allowed. The transactions that were between the parties were for the 'meat' in respect of which the levy of sales tax was sought to be imposed. That cannot be done. In that view of the matter, we are of the opinion that the High Court was in error in holding that the transactions in question were subject to sales tax. Issues:Assessment under Assam Sales Tax Act, 1947 on the sale of 'meat on hoof' - Interpretation of Schedule III exemption for 'meat' - Whether 'meat on hoof' qualifies as 'meat' for exemption - Application of common parlance meaning - Comparison with similar cases.Analysis:The judgment by the Supreme Court involved an appeal challenging the assessment under the Assam Sales Tax Act, 1947 on the sale of 'meat on hoof.' The appellant, engaged in supplying ration items to Central Reserve Police Units, had submitted a tender including the supply of 'meat on hoof' as per specific requirements. The appellant contended that 'meat on hoof' was essentially 'meat' and thus exempt from sales tax under Schedule III of the Act.The appellant relied on the exemption for 'meat' listed in Schedule III, arguing that the term 'meat on hoof' should be considered as 'meat' for exemption purposes. The High Court, however, opined that 'meat on hoof' referred to live animals and not dressed meat, as indicated in the exemption. The Court emphasized interpreting terms based on popular meaning and common parlance, citing precedents to support this approach.In a similar case, the Supreme Court analyzed the term 'meat on hoof' and its taxability under the Punjab Act. The Court highlighted the importance of contract terms and the intended purpose of the transaction in determining whether 'meat on hoof' constituted live animals or meat. In the present case, evidence showed that the appellant intended to supply meat for ration, and the transformation of 'meat on hoof' into meat proper upon slaughtering supported the appellant's claim for exemption.The Court further delved into the definition of 'hoof' from various sources to understand the term 'meat on hoof' in context. Conclusively, the Court held that the transactions between the parties were for the supply of 'meat,' exempted under the Act, and not for live animals. Therefore, the High Court's decision subjecting the transactions to sales tax was deemed erroneous, leading to the allowance of the appeals and setting aside the assessment order and demand notice. The appellant was awarded costs for the appeals.In summary, the judgment revolved around the interpretation of the term 'meat on hoof' in relation to the exemption for 'meat' under the Assam Sales Tax Act, emphasizing common parlance understanding and the intended purpose of the transactions to determine tax liability accurately.