Commercial parlance test for exemption entries: cold-stored meat was not frozen meat, but preserved fish remained fresh fish.

Tax exemption entries describing everyday commodities must be construed in their commercial sense. Meat merely kept in a refrigerator or ordinary cold storage at about 0 C did not amount to "frozen meat", because frozen meat in trade parlance means meat frozen hard at a much lower temperature. Fish kept in cold storage to preserve freshness did not lose its character as "fresh fish", since preservation without staleness or decomposition does not take it outside that description. The exemption applied to fresh fish, while meat preserved in ordinary cold storage was not treated as frozen meat.

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Issues: (i) Whether meat kept in refrigerator or cold storage amounted to "frozen meat" within entry 25 of the exemption notification under section 10 of the Kerala General Sales Tax Act, 1963. (ii) Whether fish kept in cold storage or refrigerator retained the character of "fresh fish" within entry 23 of the same notification.

Issue (i): Whether meat kept in refrigerator or cold storage amounted to "frozen meat" within entry 25 of the exemption notification under section 10 of the Kerala General Sales Tax Act, 1963.

Analysis: The expression was held to require construction according to the commercial sense in which the trade and commerce understood it. Mere preservation of meat in a refrigerator or cold storage at about 0oC did not mean that the meat had been frozen in the commercial sense. Frozen meat, as ordinarily understood, connotes meat frozen hard by being kept at very low temperature much below the freezing point of water, under conditions associated with true freezing and frozen storage. Meat merely kept in cold storage to preserve it does not answer that description.

Conclusion: The meat turnover was not liable to be treated as turnover in respect of "frozen meat". The finding was in favour of the assessee and against the revenue.

Issue (ii): Whether fish kept in cold storage or refrigerator retained the character of "fresh fish" within entry 23 of the same notification.

Analysis: The term "fresh fish" was also construed in its commercial sense. Fish does not cease to be fresh merely because it is kept in cold storage to preserve freshness, so long as it has not become stale or decomposed. The notification exempted fresh fish, and preservation in cold storage for maintaining freshness did not take the goods outside that description.

Conclusion: Fish kept in refrigerator or cold storage continued to fall within "fresh fish" and remained exempt. The finding was in favour of the assessee and against the revenue.

Final Conclusion: The decision applied the commercial parlance test to the exemption entries and held that meat preserved in ordinary cold storage was not "frozen meat", while fish preserved in cold storage continued to be "fresh fish" for the purposes of the exemption notification.

Ratio Decidendi: Taxing and exemption entries describing everyday commodities must be construed in their commercial sense, and goods preserved in ordinary cold storage do not become "frozen" unless they are frozen hard in the trade sense, whereas preservation of fish to maintain freshness does not destroy its character as fresh fish.

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