2025 (12) TMI 508 - HC - VAT / Sales Tax

Canned pineapple and fruit cocktail not 'fresh fruits' under Entry A-23, taxable as processed, preserved goods

HC held that pineapple slices, pineapple tidbits and fruit cocktail preserved in sugar syrup and canned in vacuum-sealed containers are not 'fresh fruits' ... Liability of tax - goods like pineapple slices, pineapple tidbits, fruit cocktail preserved in sugar syrup and canned in vacuum sealed tin containers are fresh fruits and are covered by the scope of the entry A-23 of the Bombay Sales Tax Act or not - HELD THAT:- The Maharashtra Sales Tax Tribunal (Tribunal), by relying upon the decision of the Hon’ble Supreme Court in the case of Deputy Commissioner, Sales Tax (Law) Board of Revenue (Taxes) Ernakulam Vs. Pio Food Packers [1980 (5) TMI 30 - SUPREME COURT] has held that the case in question could be classified as ‘fresh fruit’ for Entry A-23 and accordingly, held in favour of the Assessee. The definition in Section 5-A(1)(a) had envisaged the consumption of a commodity in the manufacture of another commodity. The goods purchased had to be consumed, the consumption should be in the process of manufacture, and the result must be the manufacture of other goods. It was precisely in this context that the Hon’ble Supreme Court, after noting that the pineapple purchased by the Assessee were washed, the inedible portion, the end crown, skin and inner core are removed, thereafter the fruit was sliced and the slices are filled in cans, sugar is added as a preservative, the cans are sealed under temperature and then put in boiling water for sterilization, held that there was no consumption of the original pineapple fruit for manufacture - The observations relied upon by the Tribunal that there was no essential difference between the fruit and the canned pineapple slices must be read and construed in the context of the issue before the Hon’ble Supreme Court, i.e. whether the manufacturing process involved the consumption of the original pineapple fruit. The issue involved in Pio Food Packers [1980 (5) TMI 30 - SUPREME COURT] was not comparable to the issue involved in the present matter, dealing with the precise classification into which the goods like pineapple slices, pineapple tidbits, fruit cocktail preserved in sugar syrup and canned in vacuum containers were fresh fruits covered by the scope of Entry A-23. In any event, it is apparent that the Hon’ble Supreme Court was not dealing with a specific entry like ‘‘fresh fruits.” Therefore, the Tribunal was not justified in deciding this matter based on some of the observations in Pio Food Packers without appreciating the context in which such observations were made. In this case, the legislature's choice of the word ‘fresh’ must not be ignored or made meaningless. The word ‘fresh’ acts as a limitation. If the legislative intention was to include all types of fruits in every form—such as fresh, canned, preserved, and so on—under a single entry, then perhaps the Legislature would have used the term ‘fruits’. However, the inclusion of ‘fresh’ clearly shows an intention to exclude fruits that are not in their natural state, such as dried, frozen, canned, or preserved foods. The Tribunal was not justified in holding that the goods like pineapple slices, pineapple tidbits, fruit cocktail preserved in a sugar syrup and canned in vacuum sealed containers are ‘fresh fruits’ covered by the scope of Entry A-23 in the Scheduled of the Bombay Sales Tax Act and consequently not liable to be taxed. The Reference is accordingly answered in favour of the Revenue and against the Assessee. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether pineapple slices, pineapple tidbits and fruit cocktail preserved in sugar syrup and canned in vacuum sealed tin containers are properly classifiable as 'fresh fruits' under Entry A-23 of the Bombay Sales Tax Act, 1959, and hence entitled to nil rate/exemption. 1.2 Whether the Tribunal was justified in relying on the decision concerning pineapple slices in sealed cans for the purpose of determining the classification of such goods as 'fresh fruits' under Entry A-23. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Classification of canned pineapple slices, tidbits, and fruit cocktail as 'fresh fruits' under Entry A-23 Legal framework 2.1 Entry A-23 of the Schedule, as applicable, provided exemption at nil rate for: (1) 'Fresh vegetables and potatoes, sweet potatoes elephants foot (yam) onion and garlic' and (2) 'Fresh fruits.' Interpretation and reasoning 2.2 The Court held that the 'common parlance test' is applicable in interpreting taxing entries, relying on the principle that, in the absence of specific statutory definitions, words in taxing statutes must be understood in their popular, commercial sense, not their scientific or technical sense. 2.3 Referring to prior authority on the expression 'fresh fruits' and 'vegetables', the Court reaffirmed that such terms, being household articles of everyday use, are to be construed as a householder would understand them, i.e., what an ordinary consumer would bring home when asked to purchase 'fresh fruit.' 2.4 Applying this test, the Court reasoned that pineapple slices, pineapple tidbits or fruit cocktail preserved in sugar syrup and sold in vacuum sealed cans would not be regarded in common parlance as 'fresh fruits'. A householder asked to bring 'fresh fruit' would not ordinarily return with canned fruit preserved in sugar syrup in vacuum sealed containers. 2.5 The Court further emphasized that Entry A-23 uses the qualified expression 'fresh fruits', not the broader term 'fruits'. The word 'fresh' operates as a limitation, indicating legislative intent to cover only fruits in their natural, perishable state, and to exclude fruits that are canned, preserved, frozen, dried or otherwise processed. 2.6 The Court noted that the Schedule to the Act itself contains separate entries for preserved foods, and there exists a clear and commonly understood distinction between 'fresh fruits', 'canned fruits' and 'preserved foods'. 'Fresh fruits' are understood as goods in their natural, unprocessed, perishable state, whereas 'canned foods' are processed, preserved goods with extended shelf life. 2.7 In light of this legislative scheme and commercial understanding, the Court held that the expression 'fresh fruits' in Entry A-23 cannot be interpreted to include canned, preserved products such as pineapple slices, tidbits and fruit cocktail in sugar syrup. Conclusions 2.8 Goods like pineapple slices, pineapple tidbits and fruit cocktail preserved in sugar syrup and canned in vacuum sealed containers are not 'fresh fruits' within the meaning of Entry A-23 of the Bombay Sales Tax Act, 1959. 2.9 Such goods are therefore not entitled to exemption/nil rate of tax under Entry A-23 and are liable to tax in accordance with the Act. Issue 2: Propriety of the Tribunal's reliance on the decision concerning pineapple slices in cans for 'manufacture' under another statute Legal framework 2.10 The Tribunal had relied on a decision in which the Supreme Court considered whether processing pineapple fruit into pineapple slices in sealed cans resulted in 'consumption' of the original commodity in the 'manufacture' of another commodity under Section 5-A(1)(a) of the Kerala General Sales Tax Act, 1963. Interpretation and reasoning 2.11 The Court observed that the issue in that decision was confined to whether the processing of pineapple into slices in cans involved 'consumption' of the commodity for the purposes of 'manufacture' of another commodity, under a specific statutory provision, and not to the classification of such goods as 'fresh fruits'. 2.12 The observations there, that there was no 'essential difference' between pineapple fruit and canned pineapple slices, were made in the limited context of determining whether a new commodity had emerged for the purposes of the manufacture provision; they were not directed to the meaning of 'fresh fruits' in an exemption entry. 2.13 The Court held that the issue before it-classification under a specific entry using the qualified term 'fresh fruits'-was distinct and not comparable to the question of whether a commodity had been 'consumed' in the course of 'manufacture' of another commodity. 2.14 The Court also distinguished another decision concerning whether processed and frozen shrimps, prawns and lobsters continued to be the same commodity for purposes of a central sales tax provision, noting that in that case the statutory language did not qualify the goods with words like 'raw' or 'fresh', whereas in the present case the entry specifically used the term 'fresh fruits'. 2.15 The Court concluded that reliance by the Tribunal on those precedents, without appreciating the different statutory language and context, was misplaced. Conclusions 2.16 The Tribunal was not justified in relying on the earlier decision concerning pineapple slices in sealed cans for the purpose of determining whether canned and preserved pineapple products fall within 'fresh fruits' under Entry A-23. 2.17 The Tribunal's view that such goods are 'fresh fruits' under Entry A-23 was erroneous and liable to be set aside. Overall disposition 2.18 The question referred was answered in favour of the Revenue and against the assessee, holding that the goods in question are not 'fresh fruits' under Entry A-23 and are not entitled to exemption from tax.