Statutory exemption for cooked food excludes drinks but covers solid refreshments served on railway platforms and trains.

The exemption for "cooked food" in item No. 10 of the Bombay Sales Tax Act was construed in context as covering solid food prepared by heat, such as biscuits and cakes, but not tea, coffee or other drinks; however, the wording "or other place where cooked food is served" was wide enough to include service on a railway platform or in a train, so solid cooked refreshments served there remained exempt. Penalties under Section 12(3A) could not be imposed on returns relating to a period before that sub-section came into force, because the provision was not shown to have retrospective effect. The penalties were therefore invalid and had to be deleted.

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Issues: (i) Whether the expression "cooked food" in item No. 10 of the Schedule to the Bombay Sales Tax Act, 1946 included tea, coffee and similar refreshments, and whether such solid refreshments served at a railway stall, on the platform, or in the train were exempt from sales tax. (ii) Whether penalties imposed under Section 12(3A) of the Bombay Sales Tax Act were valid when the returns related to a period before that sub-section came into force.

Issue (i): Whether the expression "cooked food" in item No. 10 of the Schedule to the Bombay Sales Tax Act, 1946 included tea, coffee and similar refreshments, and whether such solid refreshments served at a railway stall, on the platform, or in the train were exempt from sales tax.

Analysis: The words used in the exemption item were read in their statutory context. The phrase "cooked food" was followed by the word "eaten", which indicated solid food capable of being masticated and swallowed rather than drinks. The later amendment substituting "consumed" for "eaten" and adding drinks was treated as significant. On that construction, tea and coffee were outside the exemption. At the same time, the words "or other place where cooked food is served" were held wide enough to cover service on the platform and in the train, because passengers are commonly served at those places. The exempt class was confined to solid refreshments prepared by the action of heat, such as biscuits and cakes.

Conclusion: The exemption did not extend to tea, coffee and other drinks, but did extend to solid cooked refreshments served to passengers on the platform or in the train.

Issue (ii): Whether penalties imposed under Section 12(3A) of the Bombay Sales Tax Act were valid when the returns related to a period before that sub-section came into force.

Analysis: Section 12(3A) was introduced by Bombay Act I of 1949 and came into force after the relevant returns had been submitted. No clear legislative intention was shown to make the provision retrospective. The ordinary rule that legislation operates prospectively, unless retrospective intent is expressed or necessarily implied, therefore applied. Since the order of penalty rested only on Section 12(3A), the penalty could not be sustained for a prior period.

Conclusion: The penalties were invalid and had to be deleted.

Final Conclusion: The assessment was sustained only to the extent consistent with exemption for solid cooked refreshments served at the specified places, while the penalties were quashed, and the matter was sent back for recomputation of tax without penalty.

Ratio Decidendi: Statutory exemption clauses are construed according to the ordinary meaning of the words used in their context, and a penal tax provision cannot be applied retrospectively in the absence of clear legislative intent.

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