2003 (11) TMI 328 - SC - VAT and Sales Tax

Whether tea can be included within the meaning of foodstuffs listed as sub-clause (v) of clause (a) of section 2 of the Essential Commodities Act, 1955 which defines essential commodity ? Held that - Appeal allowed. As held that the State of Tamil Nadu could not have promulgated an order under section 3 of the EC Act in the purported exercise of the power delegated by the Central Government to make an order applicable to tea, by wrongly assuming tea to be a foodstuff, the several provisions of the Tamil Nadu Scheduled Articles (Prescription of Standards) Order, 1977, must be held to be ultra vires the power of the State Government to the extent to which it makes provisions in relation to tea. The said order cannot apply to tea. The impugned judgment of the High Court is set aside.

Summary

Issues Involved:
1. Constitutional validity of the Tamil Nadu Scheduled Articles (Prescription of Standards) Order, 1977.
2. Whether "tea" can be included within the meaning of "foodstuffs" under the Essential Commodities Act, 1955.
3. Delegation of powers by the Central Government to the State Government concerning "tea."

Issue-wise Detailed Analysis:

1. Constitutional Validity of the Tamil Nadu Scheduled Articles (Prescription of Standards) Order, 1977:
The appellants challenged the constitutional validity of the Tamil Nadu Scheduled Articles (Prescription of Standards) Order, 1977, specifically its application to "tea." The Order was promulgated by the State of Tamil Nadu under the delegated powers from the Central Government to regulate the supply and quality of certain essential articles. The High Court upheld the validity of the Order, but the appellants contested this decision.

2. Whether "Tea" Can Be Included Within the Meaning of "Foodstuffs" Under the Essential Commodities Act, 1955:
The core issue revolved around whether "tea" qualifies as "foodstuff" under sub-clause (v) of clause (a) of section 2 of the Essential Commodities Act, 1955 (EC Act). The term "essential commodity" includes "foodstuffs, including edible oilseeds and oils." The court examined the definition of "foodstuff" in common parlance, commercial context, and amongst consumers. Various dictionaries and judicial precedents were referenced to determine that "foodstuff" generally refers to substances eaten or drunk for nourishment. The court concluded that "tea" is not "foodstuff" as it is consumed as a beverage for its flavor and stimulating effect, not for nourishment or nutritional value.

3. Delegation of Powers by the Central Government to the State Government Concerning "Tea":
The EC Act allows the Central Government to delegate its powers to State Governments. The delegation notifications dated June 20, 1972, and June 9, 1978, delegated powers concerning "foodstuffs" to State Governments. Since "tea" is not considered "foodstuff," the power to regulate "tea" was not delegated to the State Government. The court found that the Tamil Nadu Government lacked the authority to include "tea" in its Order under the EC Act, as the delegation of powers did not cover "tea."

Conclusion:
The Supreme Court held that "tea" is not "foodstuff" under the EC Act, and thus, the Tamil Nadu Government did not have the delegated authority to regulate "tea" under the Tamil Nadu Scheduled Articles (Prescription of Standards) Order, 1977. Consequently, the provisions of the Order relating to "tea" were declared ultra vires and invalid. The appeals were allowed, and the impugned judgment of the High Court was set aside.