1975 (2) TMI 100 - HC - VAT and Sales Tax

Issues Involved:
1. Whether ice-cream qualifies as "food".
2. Whether ice-cream can be considered "cooked food".
3. Whether the sales of ice-cream at the respondents' depots qualify for exemption under entry No. 14 of Schedule A to the Bombay Sales Tax Act, 1959.

Issue-wise Detailed Analysis:

1. Whether ice-cream qualifies as "food":

Mr. Parekh, representing the applicant, argued that ice-cream does not constitute "food" as it does not meet the criteria of being a substantive dish necessary for maintaining life and sustaining growth. He referred to definitions from Webster's Third New International Dictionary and the Shorter Oxford English Dictionary, which define "food" as material taken into the body to sustain growth and repair tissues, emphasizing the distinction between "food" and "drink".

However, the court observed that both dictionaries generally define "food" as something that can be eaten as opposed to something that can be drunk. Entry No. 14 of Schedule A also brackets "food" and "drink" together, indicating that "food" is used in its general sense. The court concluded that even if the term "food" were to be considered in terms of nutritive value, ice-cream, primarily made from milk, would fulfill this criterion due to its high calorie and vitamin content.

2. Whether ice-cream can be considered "cooked food":

Mr. Parekh's contention was twofold: first, that ice-cream is not cooked in ordinary parlance, as it is the result of freezing rather than cooking; and second, that "cooked food" refers to food consumed during regular meal hours. He relied on definitions of "to cook" from Webster's Third New International Dictionary and the Shorter Oxford English Dictionary, which involve preparing food by heating processes.

Mr. Patel, representing the respondents, argued that cooking involves any essential part of the preparation involving heat, even if the final product is not hot. The court examined the process of manufacturing Kwality Ice Cream, which involves boiling milk, adding sugar, and further boiling before cooling and freezing. The court referred to the Calcutta High Court's decision in Santosh Kumar Ghosh v. Commercial Tax Officer, which held that cooking includes preparation involving heat, even if other actions are involved.

The court found that the extensive application of heat in the preparation of ice-cream qualifies it as "cooked food". The Madhya Pradesh High Court's decision in Commissioner of Sales Tax, M.P., Indore v. Shri Ballabhdas Ishwardas, which equated "cooked food" with a "meal", was distinguished, as the entry in question did not mention a meal but rather "cooked food".

3. Whether the sales of ice-cream at the respondents' depots qualify for exemption under entry No. 14 of Schedule A to the Bombay Sales Tax Act, 1959:

Mr. Parekh argued that the exemption should apply only if the sales were made by an eating house, restaurant, hotel, refreshment room, or boarding establishment, which was not primarily a shop for selling sweetmeats, confectionery, cakes, biscuits, or pastries. He contended that the respondents' depots did not qualify as eating houses.

The court, however, referred to its earlier decision in Commissioner of Sales Tax v. Lala Lajpatrai Hotel, which held that it is irrelevant whether the food is consumed inside or outside the eating house. The Tribunal had found that ice-cream was sold for consumption at the depots, making them eating houses under the terms of the entry.

The court concluded that the interpretation sought by Mr. Parekh was unnecessary, as the depots met the criteria of being eating houses where ice-cream was sold for consumption. Therefore, the sales of ice-cream at the respondents' depots were covered by entry No. 14 of Schedule A and were exempt from tax.

Conclusion:

The court answered the question in the affirmative, holding that the Tribunal was justified in its interpretation, and awarded costs to the respondents. The reference was answered in the affirmative.

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