1965 (6) TMI 6 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether "chhana" is considered as "cooked food" as per the Bengal Finance (Sales Tax) Act, 1941.
2. Whether the findings of the Commercial Tax Officer regarding the classification of "chhana" as cooked food were based on evidence and in conformity with the remand order.

Analysis:
The judgment by the High Court of Calcutta dealt with the issue of whether "chhana" should be classified as "cooked food" under the Bengal Finance (Sales Tax) Act, 1941. The Rules framed under the Prevention of Food Adulteration Act, 1954 defined "chhana" as a product obtained by precipitating curd from boiling whole milk by the addition of specific agents. The petitioner, a wholesale dealer in "chhana," contended that it should be exempt from taxation as cooked food. The dispute arose when the Commercial Tax Officer initiated a case for sales tax assessment on the petitioner, rejecting the argument that "chhana" falls under the exemption category of cooked food.

The Court previously remanded the matter to the Commercial Tax Officer to determine if "chhana" qualifies as cooked food based on evidence. After the remand, the Commercial Tax Officer concluded that "chhana" does not meet the criteria of cooked food exempt from taxation. The petitioner challenged this conclusion, alleging that the officer did not adhere to the remand order and that the findings were based on conjecture rather than evidence. The petitioner presented witnesses and a practical demonstration of "chhana" preparation to support their claim that it should be considered cooked food.

The Commercial Tax Officer's decision was based on the interpretation of the cooking process involved in making "chhana." The officer argued that while boiling milk is part of the preparation process, the addition of acid agents to extract "chhana" does not constitute cooking. However, the Court disagreed, emphasizing that the boiling of milk is an essential step in the cooking process, and the subsequent actions do not negate the classification of "chhana" as cooked food. The Court held that "chhana" qualifies as cooked food under the Act, making it exempt from sales tax.

In conclusion, the Court quashed the Commercial Tax Officer's order and issued a writ of certiorari in favor of the petitioner, granting costs. The judgment clarified that "chhana" is indeed considered cooked food under the Bengal Finance (Sales Tax) Act, entitling it to exemption from sales tax.