1984 (4) TMI 269 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the term "cooked food" under section 3(1)(a) of the Sales Tax Act.

Analysis:
The case involved a reference by the Board of Revenue for Rajasthan regarding the taxability of bread sold by M/s. Babu Bakery. The question was whether bread should be considered as cooked food under section 3(1)(a) of the Rajasthan Sales Tax Act. The assessee contended that bread falls under the category of cooked food and hence should not be taxable. The relevant provision stated that dealers who import or manufacture goods other than cooked food are liable to pay tax if their turnover exceeds a certain threshold.

The court referred to precedents from other jurisdictions to determine the classification of biscuits as cooked food. It was established that items like biscuits, although involving a form of cooking in their preparation, are not considered cooked food in the context of meal consumption. The court emphasized that the interpretation of tax laws should align with the common understanding of terms in ordinary parlance within the relevant area.

In the absence of a specific definition of "cooked food" in the Act, the court relied on general understanding and common usage of the term. The court examined the process of baking involved in bread manufacturing and concluded that while baking is a form of cooking, bread does not qualify as cooked food typically consumed during meal hours. The court also highlighted the significance of the expression "manufactures any goods other than cooked food" in the Act, indicating a distinction between bakery products and cooked food.

Furthermore, an amendment to the Act excluded bakery products from the definition of cooked food, supporting the interpretation that bread is not considered cooked food for tax purposes. Drawing from decisions in other jurisdictions and the Supreme Court, the court held that bread should not be classified as cooked food under section 3(1)(a) of the Act. Consequently, the court ruled in favor of the department, denying the assessee's claim that bread should be exempt from taxation. As there was no representation from the assessee, no costs were awarded in the matter.