1979 (2) TMI 179 - HC - VAT and Sales Tax

Issues Involved:
1. Definition and interpretation of "frozen meat" and "fresh fish" under the Kerala General Sales Tax Act, 1963.
2. Whether the meat stored in the assessee's cooler or refrigerator qualifies as "frozen meat" and thus falls outside the exemption.
3. The principle of construction to be adopted for interpreting the terms "frozen meat" and "fresh fish."
4. Whether the Tribunal erred in disallowing the petition to adduce additional evidence.
5. Whether the decision in Vimala Cold Storage v. State of Kerala requires reconsideration.
6. Evidence to establish whether the meat sold by the petitioner is "frozen meat" or if the cold storage is a freezer cold storage.

Detailed Analysis:

1. Definition and Interpretation of "Frozen Meat" and "Fresh Fish":
The primary issue revolves around the interpretation of the terms "frozen meat" and "fresh fish" as per the exemption notification under section 10 of the Kerala General Sales Tax Act, 1963. The Court emphasized that the meaning of these terms should be understood according to the common commercial understanding rather than their dictionary or technical meanings. This principle was supported by previous decisions, such as Krishna Iyer v. State of Kerala and Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, Akola, where the Supreme Court ruled that terms in taxing statutes should be construed in their popular sense.

2. Whether the Meat Stored in the Assessee's Cooler or Refrigerator Qualifies as "Frozen Meat":
The Court examined whether the meat stored in the assessee's cooler or refrigerator could be classified as "frozen meat" and thus fall outside the exemption. The Sales Tax Appellate Tribunal had previously held that the meat was "frozen meat" and therefore not exempt. However, the Court referred to various treatises and authorities that expounded the concept and technique of freezing meat, concluding that "frozen meat" in the commercial sense involves keeping meat at very low temperatures much below the freezing point of water. The Court determined that merely keeping meat in a refrigerator or cooler at temperatures at which water forms into ice does not qualify as "frozen meat" in the commercially understood sense.

3. Principle of Construction to be Adopted:
The Court reiterated that the principle of construction for terms in taxing statutes should be based on how the terms are understood in the world of trade and commerce. This principle was supported by various authorities and treatises, including the decision in Unwin v. Hanson, which emphasized that words in Acts of Parliament should be construed according to their common and ordinary use unless the Act is directed at a specific trade or business.

4. Tribunal's Disallowance of Additional Evidence:
The Court did not provide a specific answer to whether the Tribunal erred in disallowing the petition to adduce additional evidence, as it was not necessary in light of the Court's conclusions on other issues.

5. Reconsideration of the Decision in Vimala Cold Storage v. State of Kerala:
The Court found that the decision in Vimala Cold Storage v. State of Kerala, which held that meat kept in cold storage at a minimum temperature of 0^0C qualifies as "frozen meat," was incorrect. The Court concluded that this decision requires reconsideration, as it did not align with the commercial understanding of "frozen meat."

6. Evidence Establishing Whether the Meat Sold is "Frozen Meat":
The Court did not specifically answer whether there was evidence to establish that the meat sold by the petitioner was "frozen meat" or if the cold storage was a freezer cold storage, as it was unnecessary in light of the Court's conclusions on other issues.

Conclusion:
The Court answered the questions of law as follows:
- Question (a): In the negative, in favor of the assessee and against the revenue.
- Question (b): Not answered due to the conclusion reached.
- Question (c): In the affirmative, in favor of the assessee and against the revenue.
- Question (d): Not answered due to the conclusion reached.

The Court allowed the tax revision cases, reversing the Tribunal's order without costs. In the appeals (W.A. Nos. 107 and 336 of 1976), the Court held that the turnover from meat kept in a refrigerator or cold storage is not "frozen meat" and is not assessable to tax, and that the turnover from fish kept in a refrigerator is exempt from tax as "fresh fish." The Court dismissed the writ petitions challenging provisional assessments, as the final assessments were pending and the questions raised were hypothetical and academic at that stage.

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