1969 (6) TMI 35 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether ginger is considered a vegetable for the purpose of taxation under the Orissa Sales Tax Act.

Analysis:
The High Court of Orissa was presented with the issue of determining whether ginger should be classified as a vegetable for taxation purposes under the Orissa Sales Tax Act. The Sales Tax Tribunal referred the question to the High Court, seeking clarification on whether ginger falls under the definition of vegetables, which are not taxable under the Act. The Tribunal's decision was based on the test laid down in a previous case, Dhadi Sahu v. Commissioner of Sales Tax, Orissa I.L.R. 1961 Cutt. 175, which defined vegetables as plants primarily grown for food purposes. The Division Bench emphasized that vegetables are plants cultivated in kitchen gardens for consumption as food. The Court noted that ginger in Orissa is not primarily used as a food item but rather for enhancing the taste of main dishes, whether vegetarian or non-vegetarian.

The Court acknowledged that the definition of vegetables for taxation purposes differs from the common understanding of the term. It cited the Supreme Court's interpretation in Ramavatar v. Assistant Sales Tax Officer, Akola, and Another A.I.R. 1961 S.C. 1325, where vegetables were defined as plants grown in a kitchen garden or farm for table use. The Supreme Court's test did not require the vegetable to be the primary food item but rather suitable for table consumption. The Court distinguished between items like sugarcane and betel leaves, which, although grown in gardens, are not typically consumed directly as food. The judgment highlighted that certain items like mint or coriander, used for flavoring, are still considered vegetables if grown in a kitchen garden and used for the table.

The Court analyzed the Division Bench's decision in light of the Supreme Court's consistent interpretation of the term "vegetable." It clarified that the Division Bench's reliance on a particular passage led to an incorrect conclusion regarding the primary purpose of food consumption. The Court emphasized that the Orissa decision remains valid in determining vegetables based on local perceptions. The judgment referenced cases from Kerala and West Bengal supporting the classification of ginger as a vegetable. Ultimately, the Court held that ginger should be considered a vegetable for taxation purposes, overturning the Tribunal's decision. The parties were directed to bear their own costs, with the petitioner entitled to a refund of the deposited tax amount under the Orissa Sales Tax Act.

In conclusion, the High Court of Orissa clarified the classification of ginger as a vegetable for taxation under the Orissa Sales Tax Act based on the interpretation of the term "vegetable" as per legal precedents and local perceptions.