TaxTMI 
TaxTMI 
2015 (9) TMI 778
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....see is a registered dealer under the Bombay Sales Tax Act,1959 (For short "the Act") and manufacturer of 'Ice cream' which is covered of Schedule Entry "C-II- 35(1)". The Government of Maharashtra had issued a Notification under Section-41 of the Act with effect from 1st April, 1994 and introduced Entry 374 under which the effective rate of tax was reduced to 4% in respect of "Sweet and Sweetmeats" covered by Schedule Entry "C-II- 35(1)". 3. In view of the notification providing for a reduced rate of tax, on 31st December, 1994, the applicant filed an application under Section 52 of the Act before the Commissioner praying that the effective tax rate in respect of sales on Ice cream made by the applicant under Invoice 292 dated 1st May, 1994 be determined. This application came to be decided by the Commissioner by an order dated 29th March, 1995, wherein it was held that ice-cream in common parlance was not considered as "Sweet and Sweetmeats" and therefore, was not covered by the said term appearing in Scheduled Entry "C-II-35(1)". It was thus, held that 'Ice cream' being distinct and separate from the term "Sweet and Sweetmeats" was exigible to tax at the rate of ....
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....r entry No. "C-II-35(1)". Notification Entry 374 reads as under:- 374 Sales or Purchases of Sweets and sweetmeats covered by sub entry (1) of entry 35 in Part II of Schedule-C To the extent to which the amount of sales tax or as the case may be purchase tax exceeds four paise in the rupee Nil. Government Notification F.D.No.STA- 1094/12/Taxation- 2 dated 8.4.94. 8. On behalf of the applicant, it is contended that the legislative background pertaining to Entry "C-II-35(1)" would be of relevance in order to appreciate the contentions as raised on behalf of the applicant. The contention is that from the year 1960 till 30th June, 1981 'Ice cream' was admittedly treated as "Sweet and Sweetmeats" under the Act. On 1st July 1981 when the amendment was brought about to Entry No. "C-II-35(1)" 'Ice-cream' was not placed as a separate entry in the Schedule but was clubbed in the same schedule entry and thus was generally considered to be "Sweet and Sweetmeats". The contention is that a clear impression was created that 'Ice cream' would continue to fall in Schedule Entry No. "C-II-35(1)" even after 1st July, 1981. Thus after the notification entry 374 was ....
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....cludes 'Ice-cream'. Other items being shrikand, basundi and doodhpak, cakes, pasteries, biscuits, kulfi and non-alcoholic drinks containing Ice-creams or kulfi. All these items are sweet and therefore, ''Ice-cream' is required to be treated as a sweet. (vi) When two meanings are possible then a meaning which is favourable to the assessee is required to be applied and thus notification entry No.374 which prescribes a concessional rate of tax is applicable to 'Ice-cream'. (vii) The legislature had consciously clubbed sweet items in one schedule entry namely in schedule entry C-II-35(1) and therefore, necessarily benefit of the notification entry 374 was required to be held applicable also to the item 'Ice-cream'. 10. In support of his submissions, Mr. Joshi has relied on the following decisions. Commissioner of Sales Tax vs Kwality Frozen Foods (2009) 19 VST 355 (Bom), Commissioner of Sales Tax vs Pure Ice cream Company (1975) 36 STC 18 (Bom), Commissioner of Sales Tax vs Mangharam & Company (1976) 37 STC 599 (Bom), Commissioner of Sales Tax vs Radha Dyeing & Printers Mills (1981) 48 STC 61 (Bom), Pappu Sweets and Biscuits vs Commissioner of T....
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....o violence to the plain language and the legislative intent as contained in notification entry 374, which is only to make available concessional rate of tax to "sweet and sweetmeats" which would include items like shrikand, basundi and doodhpak. It is submitted that the intention of legislature is basically to grant benefit to items like shrikand, basundi and doodhpak which are items of common and mass consumption than other items like cakes, pastries and ice-creams and non-alcoholic drinks. In support of his submissions, Mr. Sonpal has placed reliance on the decision in Commissioner of Central Excise, New Delhi vs Connaught Plaza Restaurant Private Limited, New Delhi (2012) 13 Supreme Court Cases 639. 12. Having considered the rival submissions as made on behalf of the parties, we now proceed to examine the question of law as to what is the correct interpretation of schedule entry C-II-35 (1) and notification entry 374 issued under section 41 of the Act and as to whether the Tribunal has correctly held that the product "Ice-cream" as manufactured by the applicant was not covered by terms 'sweet and sweetmeats', as used in schedule entry C-II-35 (1) and as also notificatio....
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....word "sweet and sweet meats" to include shrikand, basundi and doodhpak, we would have no hesitation to come to a conclusion that the words "sweet and sweet meat" would include only such other items which would be of a category akin to the items contained in the entry namely shrikand, basundi and doodhpak. We may also observe that a distinct feature of the first category of the entry is that these are of categories of Indian sweets which are commonly available and items of large scale consumption in Indian households. The intention of the legislature is therefore to include in the words "sweet and sweetmeats", those items which would belong to a similar category or go hand in hand with items like shrikhand, basundi or doodhpak. A hypothetical example to be considered as to what could be included in first category of "sweet and sweetmeat" which can be clubbed with items like shrikand, basundi and doodhpak, would be items like pedha or barfi. We have enumerated these items purely as an illustration and taking note of the fact that notification entry 374 has outlived its existence and is no more relevant after 30th September, 2005 inasmuch as period of dispute in this reference from is....
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....he orders passed by the Commissioner who had declined the benefit of the concessional rate of tax under notification entry 374 on sale of ice-cream. The Revenue had challenged this direction in an appeal before this Court. The Division Bench upheld the decision of the Tribunal accepting the contention on the part of the assessee that historically 'Ice-cream' was treated to be a part of entry C-II(35)(1) and therefore, bonafide the assessee had presumed that notification entry 374 will be applicable and thus, had taken benefit of Notification Entry 374 by collecting tax at the concessional rate. In our opinion, this judgment would not support the case of the applicant, inasmuch as the issue in the present reference which falls for our consideration is as to whether the words "sweet and sweetmeats" as contained in the notification entry 374 would include 'Ice-cream'. This judgment does not determine this question, except for recognizing that historically 'Ice- cream' came to be treated as part of schedule entry C-II-35(1). This position is not disputed by the Revenue. 18. The next decision as relied on behalf of the applicant is in the case of Commissioner of....
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....ses the word "food" to distinguish it from 'drink' namely what one can eat. It was thus, observed that 'Ice-cream' sold by the assessee could be consumed by the customers of the assessee in the assessee's depots. The question as referred was thus answered in the affirmative. We do not see how the judgment would assist the applicant in the present context. The entry which fell for consideration of this Court in the said decision is in no manner comparable to the entry in the present case. There the Court was concerned on the issue whether 'Ice-cream' is a food and whether it is cooked food for the purposes of interpreting the entry no.14. We are therefore, of the clear opinion that this decision in any manner would not assist the applicant. 19. Mr. Joshi then relied on the decision of the Division Bench of this Court in the case of Commissioner of Sales Tax vs. Mangharam and Company (supra). The issue which fell for consideration of the Division Bench was similar to one which was fell for consideration in the case of Pure Ice-cream Company as to whether 'Ice-cream' is a cooked food in entry no.14 of schedule A and as such, exempted from tax. The ....
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....y meaning and according to the commonly understood notions of what an ice-cream is and what sweetmeats are. The Division Bench did not accept the submission on behalf of the Revenue that 'Ice cream' is a sweetmeat. We fail to appreciate as to how this Judgment would support the case of the applicant. In fact, it completely supports the Revenue inasmuch as the Division Bench has categorically held that term sweet and sweetmeat would not include ice-cream. 20. Mr. Joshi then placed reliance on the decision of the Supreme Court in the case of Pappu Sweets and Biscutis vs. Commissioner of Trade Tax, U.P. Lucknow (supra). In our opinion, this decision is also no avail to the applicant. The issue which fell for consideration of the Supreme Court was as to whether the assessee was entitled for exemption from payment of sales tax under the exemption notification in respect of toffees. The issue was whether toffee is a sweetmeat or commodity of a like nature and whether the assessee's industrial unit making toffees would not be entitled for exemption. The Supreme Court while applying the test of strict interpretation to the exemption notification observed as under :- "7. It i....
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....ant in C.A.N.1692 of 1997 indicating that toffee is not considered as sweetmeat, that they are not sold in shops selling sweetmeats but are sold in shops selling confectioneries or other types of goods, and that the consumers do not buy toffees as sweetmeat or treat them as such. It was, however, contended by the learned counsel for the State that sometime before this exemption notification was issued by the State, the Allahabad High Court had in two cases held that toffee is a sweetmeat. But it was so held in a different context and no evidence was led by the State to show that thereafter, the dealers in toffees and consumers started treating them as sweetmeat. In the Hindi version of the notification for the word sweetmeat the word "mithai" is used. The word "mithai" has a definite connotation and it can be said with reasonable amount of certainty that people in this country do not consider toffee as "mithai". The High Court committed a grave error in holding that as some manufacturers of toffees sell their products by describing them as sweets it can be said that in commercial circles toffee is known as sweetmeat." (emphasis supplied) 21. Mr. Sonpal, learned special counsel....