Cereal classification under sales tax law: raw white oats in airtight containers fall under cereal flour entry, not food preparations.

White oats sold in airtight containers were held not to be a ready-to-eat food preparation under Entry 62 of the Kerala General Sales Tax Act, because they remain a raw cereal product requiring cooking before consumption. The court treated Entry 173 as the specific provision, since it covers flour of cereals and similar cereal products whether packed in airtight containers or not, and held that oats in crushed, flaked or powder form can fall within that entry. The commodity was therefore correctly classified under Entry 173, and the State's challenge failed.

---

---

Issues: Whether white oats sold in airtight containers is classifiable under Entry 62 of the First Schedule to the Kerala General Sales Tax Act, 1963 as food preparation sold in airtight containers, or under Entry 173 of the First Schedule to the said Act as flour of cereals.

Analysis: Entry 62 covers food preparations sold in airtight containers and food colours, essences, powders or tablets used for making food preparations. White oats are not a ready-to-eat food preparation and do not fall within the latter limb of Entry 62. Entry 173 specifically covers flour of cereals, pulses and their mixtures whether packed in airtight containers or not. Oats is a cereal, and the expression flour in that entry is broad enough to include oats sold in crushed, flaked or powder form, especially when the product remains in raw condition requiring cooking before consumption. The classification adopted by the first appellate authority and the Tribunal, therefore, correctly placed the commodity under Entry 173.

Conclusion: White oats sold in airtight containers is not taxable under Entry 62 and is rightly taxable at four per cent under Entry 173 of the First Schedule to the Kerala General Sales Tax Act, 1963.

Final Conclusion: The revisions fail and the classification in favour of the assessee stands affirmed, resulting in dismissal of the State's challenge.

Ratio Decidendi: A cereal product sold in raw, uncooked form that answers to the commercial understanding of flour or crushed cereal may fall within the specific entry for cereal flour, and not within the general entry for food preparations sold in airtight containers.

---