1970 (11) TMI 93 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Classification of "Limical" under the Bombay Sales Tax Act, 1959.
2. Interpretation of "foodstuff" and "food provision" under entry No. 6 of Schedule E.

Detailed Analysis:

1. Classification of "Limical" under the Bombay Sales Tax Act, 1959:
The primary issue in this case is whether "Limical," a product manufactured by M/s. Sarabhai Chemicals, qualifies as an article of foodstuff or food provision under entry No. 6 of Schedule E to the Bombay Sales Tax Act, 1959. The Deputy Commissioner of Sales Tax initially classified "Limical" as a food provision, citing its composition of vitamins, proteins, and fats, and its sale in sealed containers not exceeding 5 kilograms. However, the Sales Tax Tribunal overturned this decision, arguing that "Limical" does not qualify as a foodstuff and should instead be classified under the residuary entry No. 22 of Schedule E.

2. Interpretation of "foodstuff" and "food provision" under entry No. 6 of Schedule E:
The court examined whether "Limical" falls within the scope of "foodstuff" or "food provision" as per entry No. 6 of Schedule E. This entry includes various food items but excludes certain products like milk and edible oil. The court referred to dictionary definitions and previous Supreme Court rulings to interpret these terms. The dictionary meaning of "food" includes any substance that sustains and nourishes, while "foodstuff" refers to any material used as food. The court emphasized that the interpretation should align with common parlance and market understanding.

The court cited the Supreme Court's rulings in *Ramavatar Budhaiprasad v. The Assistant Sales Tax Officer* and *Commissioner of Sales Tax, Madhya Pradesh v. Jaswant Singh Charan Singh*, which established that terms in sales tax statutes should be understood as per their common parlance meaning. The court also referred to *State of Bombay v. Virkumar Gulabchand Shah*, which distinguished between the narrow and wider senses of "foodstuff." The narrow sense includes articles eaten for nutrition, while the wider sense encompasses everything used in food preparation.

Applying these principles, the court concluded that "Limical" is not commonly understood as a foodstuff or food provision. It is a specialized product intended for weight reduction and not a regular food item consumed by the general public. The court noted that "Limical" is not used indefinitely, even by those aiming to reduce weight, and is not suitable for normal consumption. Therefore, it does not meet the common parlance test for "foodstuff" or "food provision."

Conclusion:
The court held that "Limical" does not fall under entry No. 6 of Schedule E to the Bombay Sales Tax Act, 1959. The Tribunal's decision to classify "Limical" under the residuary entry No. 22 was upheld. The reference was answered in the negative, and the matter was sent back to the Tribunal for further proceedings. The Commissioner of Sales Tax was ordered to bear the costs of the opponents.