1960 (4) TMI 54 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of Entry 6 of Schedule A to the Bombay Sales Tax Act, 1953 regarding the classification of a preparation called supermindif as a tax-free item or subject to sales tax.

Detailed Analysis:

The appeal before the High Court of Bombay concerned the interpretation of Entry 6 of Schedule A to the Bombay Sales Tax Act, 1953, regarding the classification of a preparation known as supermindif. The appellants sought a determination from the Additional Collector of Sales Tax to ascertain whether supermindif falls within the tax-free category under Entry 6. The crux of the issue was whether supermindif could be considered a concentrate falling under the exempt category or if it should be subject to sales tax. The Additional Collector had opined that sales tax was applicable to the sale of supermindif, leading to the appeal challenging this view.

The High Court analyzed the ingredients and purpose of supermindif to determine its classification. Various evidence, including a letter from an Agricultural Chemist, references to mineral mixtures, and composition tables from research institutes, supported the contention that supermindif could be considered a concentrate for feeding cattle. The court noted that the ingredients of supermindif aligned with those typically found in mineral mixtures, indicating its suitability as a cattle-feed concentrate.

The Additional Collector's rationale for excluding supermindif from Entry 6 was based on the requirement to mix it with other substances and its classification as a tonic for cattle. However, the court disagreed, emphasizing that being a tonic did not preclude an item from being classified as cattle-feed. The court interpreted the legislative intent behind Entry 6, which aimed to exempt essential articles like cattle-feeds from sales tax, including concentrates. The court concluded that supermindif, prepared with specific ingredients for feeding cattle, fell within the ambit of Entry 6 and should be considered a tax-free item.

In light of the analysis, the High Court allowed the appeal, set aside the order of the Additional Collector, and held that supermindif indeed fell within Entry 6 of Schedule A to the Bombay Sales Tax Act, 1953. This judgment clarified the classification of supermindif as a tax-exempt concentrate under the relevant statutory provision, resolving the dispute regarding its liability for sales tax.