2000 (3) TMI 975 - SC - VAT and Sales Tax

Court rules damaged wheat processed for cattle fodder qualifies for sales tax exemption

The High Court determined that damaged wheat processed into cattle fodder falls under the definition of 'cattle fodder' in a 1985 notification, entitling ... Whether damaged wheat purchased by the original respondent-dealer which is subjected to certain process before being sold is 'cattle fodder' for the purpose of the notification dated June 5, 1985? Held that:- Appeal dismissed. What is exempted under the notification of June 5, 1985 is cattle fodder. In generic sense the expression 'cattle fodder' is inclusive of everything that is fed to cattle including damaged wheat. In the present case there is no such exclusion of the damaged wheat that is processed and used as feed for the cattle. If that is so there is any justification to interfere with the view taken by the High Court. Issues:1. Interpretation of the definition of 'cattle fodder' under a notification dated June 5, 1985.2. Exemption from sales tax for cattle fodder manufactured from damaged wheat.3. Applicability of the definition of cattle fodder in the context of the case.Issue 1: Interpretation of the definition of 'cattle fodder' under a notification dated June 5, 1985:The case involved a dispute regarding whether damaged wheat, processed into cattle fodder, falls under the definition of 'cattle fodder' as per a notification dated June 5, 1985. The High Court concluded that the damaged wheat, when converted into cattle fodder by grinding, qualifies as cattle fodder under the said notification. The appellant contended that the definition of cattle fodder should be strictly construed as per the notification and industry practices, suggesting that damaged wheat may not fall under this definition. However, the respondent-dealer argued that the generic understanding of cattle fodder encompasses all feed for cattle, including damaged wheat. The court dismissed the appeal, upholding the High Court's interpretation that damaged wheat converted into cattle fodder is exempt from sales tax under the notification.Issue 2: Exemption from sales tax for cattle fodder manufactured from damaged wheat:The primary contention revolved around whether the cattle fodder manufactured from damaged wheat is eligible for exemption from sales tax. The revisionist purchased damaged wheat, unsuitable for human consumption, from the Food Corporation of India and processed it into cattle fodder for sale. The assessing officer initially disputed this classification, leading to an ex parte assessment for the year 1985-86. The Tribunal held that the cattle fodder produced by the revisionist did not align with the specified definition in the notification. However, the High Court and subsequently the Supreme Court ruled in favor of the revisionist, declaring that the damaged wheat converted into cattle fodder qualifies for the sales tax exemption as per the notification.Issue 3: Applicability of the definition of cattle fodder in the context of the case:The courts analyzed the definition of cattle fodder provided in the notification to determine its applicability to the case at hand. The notification listed specific items like green fodder, de-oiled cake, and rice husk as examples of cattle fodder. The Tribunal initially contended that only items explicitly mentioned in the definition could be considered as cattle fodder, leading to a denial of the sales tax exemption for the revisionist. However, the High Court and subsequently the Supreme Court emphasized that the definition serves as an illustration and not an exhaustive list. Anything recognized as cattle fodder in the general or trade sense, not falling under the excluded items, should be treated as such. Consequently, the courts ruled that the damaged wheat converted into cattle fodder by the revisionist qualifies for the exemption, emphasizing a broader interpretation of the term 'cattle fodder.'---