2007 (4) TMI 363 - SC - VAT and Sales Tax

Whether dog feed and cat feed sold by the appellant-assessee attract nil rate of duty under entry 5 of the First Schedule to the Karnataka Value Added Tax Act, 2003? Held that - Appeal dismissed. In the present case, the word and in entry 5 is placed between the words animal feed and feed supplements followed by a punctuation mark comma . Therefore, we are not concerned with a case where two sentences are sought to be connected. We are concerned with specific category of goods. The word and is placed by the Legislature between two types of goods, namely, animal feed and feed supplements. The punctuation mark, after categorising animal feed and feed supplements , as one class, is very important. The Legislature intended, therefore, to put animal feed and feed supplements in one category. The Legislature intended to provide for nil rate of duty to specified items mentioned in entry 5. Dog and cat feed are not mentioned in those items. Therefore no infirmity in the impugned judgment of the High Court.

Summary

Issues:
Interpretation of entry 5 of the First Schedule to the Karnataka Value Added Tax Act, 2003 regarding the nil rate of duty for "dog feed" and "cat feed."

Detailed Analysis:

The main issue in this civil appeal is the interpretation of entry 5 of the First Schedule to the Karnataka Value Added Tax Act, 2003, specifically regarding whether "dog feed" and "cat feed" sold by the appellant-assessee attract a nil rate of duty under this entry. The appellant argues that dog feed and cat feed fall under the category of animal feed mentioned in entry 5, which includes various types of feed supplements for animals such as poultry feed, cattle feed, pig feed, fish feed, etc. The appellant contends that the expression "namely" in entry 5 restricts the feed supplements to specific instances listed after it, and that animal feed and feed supplements should be read disjunctively, not conjunctively, as independent categories.

However, the court disagrees with the appellant's interpretation. The court's analysis reveals that entry 5 classifies animal feed and feed supplements as one category, not two separate categories. The use of a comma after "animal feed and feed supplements" indicates that the Legislature intended to treat these as a single class of products. The subsequent word "namely" further specifies the items that fall under this category, which does not include dog feed or cat feed. The court emphasizes that the list provided in entry 5 is exhaustive and does not encompass the products in question.

Additionally, the court references a previous judgment to clarify the interpretation of a special law, highlighting that the specific wording and punctuation in entry 5 indicate the legislative intent to classify animal feed and feed supplements as a single category with specified items eligible for the nil rate of duty. As dog feed and cat feed are not included in the listed items, they do not qualify for the exemption under entry 5.

Conclusively, the court finds no merit in the appellant's arguments and upholds the decision of the High Court. The civil appeal is dismissed with no order as to costs, affirming that dog feed and cat feed do not fall under the nil rate of duty provision in entry 5 of the Act.