1993 (6) TMI 227 - HC - VAT and Sales Tax

Court rules on classification of snacks under sales tax law, emphasizing natural meaning over broader interpretation.

The High Court held that items like banana chips, tapioca chips, murukku, achappam, pakkavada, and mixture sold by a dealer are not classified as 'bakery ... - Issues:The main issue involves the interpretation of the term 'bakery products' under the Kerala General Sales Tax Act, 1963, specifically regarding whether certain items like banana chips, achappam, mixture, murukku, pakkavada, and fried groundnuts made and/or sold by a baker can be classified as bakery products.Judgment Details:The petitioner, a dealer in bakery products and tobacco products, contested the assessment of taxable turnover for the years 1986-87 and 1987-88. The Sales Tax Officer rejected the returns and assessed the dealer at higher turnovers. The Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal had differing decisions on the matter.The main contention was whether the items produced and sold by the dealer, such as sweets and fried food articles, could be considered bakery products under the relevant entries in the First Schedule to the Kerala General Sales Tax Act. The Tribunal had concluded that these items fell under bakery products based on common parlance and their availability in bakeries.However, the High Court disagreed with the Tribunal's interpretation. It emphasized that 'bakery products' should be understood in their natural, ordinary, or popular sense, specifically referring to goods ordinarily baked in a bakery. The Court highlighted that individual choices or tastes of dealers do not automatically classify non-baked goods as bakery products.Therefore, the Court reversed the Tribunal's decision, ruling that items like banana chips, tapioca chips, murukku, achappam, pakkavada, and mixture sold by the dealer are not considered 'bakery products' under the relevant entries in the First Schedule to the Kerala General Sales Tax Act.Consequently, the common order of the Sales Tax Appellate Tribunal was set aside, and the matter was remitted back to the Tribunal for further consideration in line with the High Court's observations. The tax revision cases were allowed, and the petitions were granted.