TaxTMI 
TaxTMI 
2018 (3) TMI 1326
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....the revisionist was assessed on Rs. 13,66,400/-. The first Appeal was unsuccessful and equally the Appeal preferred before the Tribunal was unsuccessful. As such, the revisionist is before us. The following substantial questions of law have been raised in the memorandum of Appeal: "(a) Whether on the facts and circumstances of the case the learned assessing authority and learned Tribunal was justified in law that the statement were made by the son of the proprietor of the firm not by the employee of the firm? (b) Whether on the facts and circumstances of the case the learned Commercial Tax Tribunal was justified in law in not giving any finding that what will be the rate of tax of Samosa for prevailing assessment year whether it should be @ 8% or whether it should be @ 5% (c) Whether on the facts and circumstances of the case the learned Commercial Tax Tribunal was justified in law in not appreciating the fact that two standards cannot be opted by the Commercial Tax Authority for two shops adjacent to each other?" 3. We have heard Mr. S.K. Posti, learned counsel for the revisionist and also Mr. Mohit Maulekhi, learned representative for the Department/respondent. 4. Lear....
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....amkin, rewari, gazak and sugar products except any of the aforesaid goods, which are notified under any other category in any notification issued under U.P. Trade Tax Act. Sale to Consumer 5% 43 (ii) Cooked food, cakes pastries, toffees, chocolate, confectionery and biscuits excluding bread, bunns and rusk. Sale to Consumer 8% 10. Thus, on the one hand cooked food attracted 8% tax when it is sold to the consumers and sweetmeats and namkin attracted 5% tax when sold to the consumers. 11. When it came to the VAT Act, under which the assessment for the subsequent six months' period was completed, cooked food initially attracted 4%. Subsequently, for later years item "cooked food" has been deleted. It is for this reason, we find in the assessment orders that, for the later period, Samosa has been taxed @ 4% and it is certainly not a mistake committed by the Officer. Unless samosa is not to be treated as cooked food. Under the VAT Act, no doubt, there is a specific entry 109 of Schedule 2B, under which, the entry sweetmeat, rewari, gazak and namkin continue to attract tax of 5%. 12. This question is no longer res integra and it is a matter which is the subject ma....
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....ing process it should be treated as cooked food. Relying on some foreign English dictionaries it is contended that cooking means preparation of food by application of heat as by boiling, baking, roasting, broiling etc. and biscuit should therefore be treated as cooked food. What is of significance in this case is that the Hindi version of the notification issued uses the expression (pakaya hua bhojan) for "cooked food" found in the notification in English language." 14. We may refer to the judgment of the Hon'ble Apex Court in the case of Commissioner of Commercial Tax, Indore and others Vs. T.T.K. Health Care Ltd. reported in (2007) 11 SCC 796. In the said case, a question arose whether fryums are to be treated as cooked food. The question arose under Section 2 (g) of the M.P. Commercial Tax Act. The Court held as under :- "12. In the present case we have quoted the definition of the term 'cooked food'. It is an inclusive definition. It includes sweets, batasha, mishri, shrikhand, rabari, doodhpak, tea and coffee but excludes ice-cream, kulfi, ice-candy, cakes, pastries, biscuits, chocolates, toffees, lozenges and mawa. That the item 'cooked food' is inclusive ....
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....-cooked items. They required further process of frying and addition of preservatives to make them consumables even after the specified time. But for the preservatives the items would have become stale." 15. It is noteworthy that the word "cooked food" under the said enactment encompassed sweets, sweetmeats, mishri, batasha etc. 16. Next, we may again notice the judgment again of the Hon'ble Apex Court in the case of Commissioner of Trade Tax Uttar Pradesh vs. Associated Distributors Limited reported in (2008) 7 Supreme Court Cases 409. In the said case, the question, which arose was whether Bubblegum is to be taxed as sweetmeats under the U.P. Sales Tax Act 1948. The Court proceeded to inter alia take the following view: 9. When we apply common parlance test and in fact ask someone to bring the sweets from the market, he will never bring bubblegum. In common parlance, even items of confectionery will not be construed as sweetmeat (mithai). In fact, bubblegum is not an item for eating. It is kept in the mouth and after chewing the same is thrown out. The bubblegum while kept in the mouth of the children is also inflated as a balloon. In fact, it is used as a "mouth freshner". I....
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.... not only see the dictionary meaning but even more the popular meaning which the word has acquired in common parlance. As stated by K.L. Sarkar (in his book Mimansa Rules of Interpretation) "the popular meaning overpowers the etymological meaning. 19. To give an example, the word "pankaja" literally means born in mud. The word "panka" means "mud" and the word "ja" means "which is born in". Hence the etymological meaning of the word "pankaja" is that "which is born in mud". Many things can be born in mud e.g. insects, vegetation, water flowers, etc. However, by popular usage the word "pankaja" has acquired a particular meaning in common parlance i.e. lotus. This meaning will, therefore, prevail over the etymological meanings. 20. Similarly, the word "furniture" has a meaning in common parlance which every layman understands. It commonly refers to chairs, desks, tables, beds, etc. Hence we should give it this popular meaning. 21. In Welcome Hotel v. State of A.P. (1983) 4 SCC 575, this Court while construing the term "foodstuff', has observed that the expression foodstuffs' is made of two expressions, food' plus 'stuff'. The expression 'food' has ....
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.... particularly when we are dealing with legislation on sales tax. The learned counsel for the respective assessees had submitted that this "common parlance" meaning of "cooked food" ascribed in Ballabhdas Ishwardas's case : [1968] 21 STC 309 was in view of the entry of "cooked food" as it stood then, with the change in the form of entry and as it stood during the relevant period the observation in that decision regarding "common parlance" meaning of "cooked food" does not hold the field. The learned counsel for the assessees relied upon a Division Bench decision of this Court in Commissioner of Sales Tax, Madhya Pradesh v. Regal Dairy, Mhow [1981] 47 STC 374. The argument does not appeal to us. The change in the form of an entry would not change its ordinary or "common parlance" meaning. It is a different matter that by the artificial definition it may be made either restrictive or extensive. At this stage we would like to extract the following observations from the decision of the Supreme Court in Commissioner of Gift-lax, Madras v. N. S. Getty Chettiar AIR 1971 SC 2410 : "14. As observed in Craics on Statute Law (6th Edn., p. 213) that an interpretation clause which extends....
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....r v. Assistant Sales Tax Officer, (1961) 12 STC 286. As has been noted above this expression has come up for consideration before this Court in several cases and the view taken is that cooked food is food which is cooked and is taken at regular meal hours, i.e. at break fast, lunch or dinner. Before the Madhya Pradesh High Court as well a similar question had also come up for consideration in Commissioner of Sales Tax v. Shri Ballabh Das Ishwar Das, (1968) 21 STC 309. The question was "whether biscuits fall under tax free goods under item no. 41 of Schedule II to the C.P. and Berar Sales Tax Act, 1947?" This entry read as under: "Cooked food other than (a) pastries, or (b) a meal, the charge for which exceeds one rupee." The view taken was that "when one talks of 'food' or 'cooked food' what one means is that which one takes into the system to maintain life and growth to supply ailment or nourishment. In a wide sense food would, no doubt, include everything that is eatable. But in a common parlance 'cooked food' means those things which one eats at regular times of the day at breakfast, dinner or supper." About biscuit it was found that no doubt it is a kind of food and....
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....ale of any of those articles singly or collectively exceeding in value rupees two constitutes 'a meal', the charge of which exceeds Rs. 2/-. The expression 'a meal' is not defined in the Act and its popular sense was accepted and it was observed: "Now when one talks of a meal what one means, is food one takes at regular times of the day, at a breakfast, dinner or supper etc. no doubt, one can satisfy the requirements of hunger and exist by eating at any time every thing that is eatable, but that is not taking 'a meal' it is making 'a meal' of the eatable or eatables." On this view it was held that the sale of any of the articles sold by the assessee did not constitute sale of any meal. They were sales of cooked food which is exempt from tax under item no. 9 of the schedule aforesaid. The earlier decision given in Sri Ballabhdas Ishwardas case was not referred in it. There was no controversy in India Coffee Worker's case that the articles sold by the assessee were cooked food. Any way from these decisions it comes out that dinner or supper. And the purpose is to serve the physical needs of the body. It is correct that requirements of hunger can be satisfied for the time being ....
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.... those specifically mentioned. What they indicate is that other commodities of like nature also were not to get benefit of the exemption. To that extent they did widen the scope of the Entry but they cannot be construed to have the effect of enlarging the meaning of the word "sweetmeat". As that was not the purpose of including those words in the Entry, the High Court was not justified in holding that they gave an unlimited and unrestricted meaning to the word "mithai" or "sweetmeat". 12. The High Court has also not correctly applied the popular parlance test. As can be seen from the observations made by it that: "There is no doubt that a toffee is a sweetmeat, as understood by the people where toffee originated" and that "Toffee and other things of that natures are of foreign origin and are sweets or sweetmeat according to those people and their nature cannot be changed simply because their origin is different from what is usually conveyed by the word 'mithai' in this part of the country", the High Court preferred to decide the issue by relying upon how toffee is understood by the people of the country where it originated rather than by considering how "toffee" is understood in....
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....rther process of cooking, which involves use of oil and heat and only after further cooking, it becomes ready to be consumed as cooked food. 26. We have noticed also that in products like icecream though there may be a process of cooking involved; in that, milk is heated and thereafter cooled to the required level, it is not understood in the market as cooked food. It may be equally true that when one goes to a hotel and asks for cooked food, he/she would ordinarily not be served with biscuits as was the position in the case of Annapurna Biscuit Manufacturing Co. Vs. Commissioner of Sales Tax, U.P., Lucknow reported in 1981 (48) STC 254. But, since in this case, we are concerned with the question as to whether Samosa is to be treated as namkeen or cooked food and we are not asked to pronounce upon whether it is to be treated as unclassified items, the choice is narrowed down to whether it is to be treated as namkeen or as cooked food. If we apply the test as to whether it is consumable in the sense that it would be ready to be eaten unlike the case of fryums, there can be no manner of doubt that samosas are cooked food. This if for the reasoning that when a person dealing in samos....
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....it Manufacturing Co (Supra). In fact, the learned counsel for the revisionist emphasized that the word "cooked food" is called in Hindi as "pakaya hua bhojan" and in that sense, it may be correct to say that Samosa may not be a meal as such. But, here we are constrained to incline ourselves to take the view that Samosas are more appropriately dealt with under the entry "cooked food" rather than "namkeen". We have noticed that samosa is certainly cooked food and since it satisfies requirement of cooked food otherwise in a broad sense and since the other alternative is to tax it under namkeen which does not appeal to us, in the absence of any material or finding in the orders, we are inclined to not overturn the order of the authorities, as confirmed by the Tribunal which is undoubtedly the fact finding authority as samosas are to be taxed at the rate of 8% for the first six months and, for the next six months, at the rate of 4%, on the basis that cooked food under the VAT Act attracted 4%. 30. Therefore, we would answer the question of law which is framed as question No.2 against the assessee and in favour of the Department. 31. As far as other questions are concerned, namely, the....
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.... necessary is that the accounts should be maintained in the ordinary course of business and in accordance with a recognized system of account keeping. Indeed, Rule 72 does not prescribe any system of accounting. It merely prescribe what information should be available in the account books. If the accounts maintained by an assessee are found to be kept in the ordinary course of business and are open to verification, they have to be accepted. On the other hand, if the accounts are defective and are not susceptible to verification and there are circumstances to show that the assessee has not correctly recorded his turnover, Rule 72 may be pressed into aid to reject the accounts and to make a proper estimate of the turnover. But, in the absence of a finding that the accounts are defective and the turnover has not been correctly recorded, mere non-compliance of Rule 72 will not lead to inevitable consequence of the rejection of accounts and enhancement of turnover. There is no provision in the Sales-tax Act which requires the accounts to be maintained in a prescribed manner. Indeed, Rule 72 itself does not say that if it is not complied with the accounts shall be rejected and a best jud....