1953 (3) TMI 17 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of the term "bread" under the Hyderabad General Sales Tax Act.
2. Exemption of double roti, shirmal, parata, and chapathi from sales tax.
3. Exemption of cooked rice from sales tax.

Analysis:

The petition before the High Court of Hyderabad sought a writ under Article 226 of the Constitution to prevent the Sales Tax Commissioner from collecting tax on specific food items. The petitioner contested the tax on double roti, parata, shirmal, cooked rice, milk, milk products, and fresh eggs. The focus was primarily on double roti, shirmal, and tanure-ki-roti, as the exemption for milk products and fresh eggs was reportedly accepted. The crux of the matter revolved around the interpretation of the term "bread" and whether it encompassed items like double roti, shirmal, parata, and chapathi.

The court deliberated on whether double roti, shirmal, parata, and chapathi could be classified as bread. The respondent argued that, except for double roti, the other items did not fall under the category of bread. However, the court rejected this contention, emphasizing that the term "bread" should be understood in the context of how it is perceived in India, not based on Western definitions. The court highlighted that various types of bread, such as Jawari-ki-roti, Bajre-ki-roti, and Makai-ki-roti, are consumed in India, each with its unique preparation method. The court concluded that the legislative intent was to include all types of bread consumed in India under the exemption, as evidenced by the amended Schedule I explicitly mentioning items like double roti, chapathi, kulcha, and shirmal.

Regarding the exemption of cooked rice, the court analyzed the term "all forms of rice" under Schedule I of the Sales Tax Act. The petitioner argued that this phrase should include all rice preparations. However, the court disagreed, stating that "forms" referred to varieties or species of rice, such as broken rice or rice flour, rather than cooked rice dishes like biriyani or polao. Consequently, the court ruled in favor of the petitioner, directing the Sales Tax Commissioner not to levy sales tax on double roti, tanure-ki-roti, and shirmal, as they were deemed to be included in the definition of "bread" under the Act.