1976 (8) TMI 131 - HC - VAT and Sales Tax

Summary

Issues involved: Determination of the tax category for biscuits under the U.P. Sales Tax Act, 1948.

Summary:
The Additional Judge (Revisions), Sales Tax, Meerut, referred a question regarding the tax category of biscuits under the U.P. Sales Tax Act, 1948. The question was whether biscuits should be classified as cooked food taxable at 2%, confectionery taxable at 3%, or an unclassified item under section 3 of the Act. A previous Division Bench ruling established that biscuits are not confectionery, leaving the decision between cooked food and unclassified item.

The contention arose whether biscuits, being a food item prepared by baking, should be considered cooked food or not. The standing counsel argued that in common understanding, biscuits are not perceived as cooked food despite being a type of food prepared with heat. Conversely, the assessee's counsel argued that since biscuits are a food item prepared with heat, they should be classified as cooked food under the Act.

The interpretation of "cooked food" was crucial, as it could encompass all food items prepared with heat. However, the context and background of the term needed consideration. The Hindi version of the government notification used "pakaya hua bhojan" for cooked food, without including terms like ashar or khad padarth. In common usage, cooked food refers to meals like breakfast, lunch, or dinner, whereas biscuits are typically consumed as snacks or with tea, not as part of a meal.

The court concluded that biscuits do not fall under the category of cooked food or confectionery but are an unclassified item subject to tax at the general rate under section 3 of the Act. Due to the complexity of the issue, each party was directed to bear their own costs in the reference.

Therefore, the judgment determined that biscuits are to be considered an unclassified item for tax purposes under the U.P. Sales Tax Act, 1948.