Cattle feed exemption covers damaged rice sold only for use as animal feed, barring VAT and sales tax.

Damaged foodgrains sold under tender conditions for exclusive use as cattle feed fall within the tax-free category in Schedule A of the Punjab Value Added Tax Act, 2005. Section 16 bars levy of tax on goods specified in Schedule A and also prohibits any person from charging tax on their sale. Applying the commercial and intended use of the commodity, the Court treated damaged rice meant only for cattle feed as covered by the exemption entry for cattle feed, with feed supplements and related fodder terms read broadly. VAT and sales tax therefore cannot be charged on such sales.

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Issues: Whether damaged foodgrains sold for use as cattle feed fall within the tax-free goods covered by Schedule A of the Punjab Value Added Tax Act, 2005, so that no VAT or sales tax can be charged on their sale.

Analysis: Section 16 of the Punjab Value Added Tax Act, 2005 prohibits levy of tax on goods specified in Schedule A and also prohibits any person from charging tax on their sale. Entry 4 of Schedule A covers aquatic feed, poultry and cattle feed, including feed supplements, grass, hay and straw. The damaged rice was intended under the tender conditions to be used only for manufacture of cattle feed, and the Court treated the commodity by reference to its commercial and intended use rather than as taxable raw material. Relying on the broad understanding of cattle feed and cattle fodder, the Court held that damaged rice used for cattle feed falls within the exempt category.

Conclusion: Damaged foodgrains purchased for use as cattle feed are tax-free under section 16 read with Schedule A, and the respondent-Corporation cannot charge VAT or sales tax on their sale.

Ratio Decidendi: Where a commodity is sold and intended for use as cattle feed and falls within the exemption entry for cattle feed, no tax can be charged on its sale under the Act.

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