1991 (3) TMI 346 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the term "food-stuff and food provisions" under entry 6 of Schedule III to the Gujarat Sales Tax Act, 1969.

Detailed Analysis:
The case involved a reference made by the Sales Tax Tribunal at the instance of the State of Gujarat regarding the classification of the sale of Cadbury's Bournvita under the Gujarat Sales Tax Act, 1969. The key question was whether the sale of Bournvita fell under entry 6 of Schedule III as "food-stuff and food provisions" or under the residuary entry 13 of Schedule III. The Tribunal had upheld the contention that Bournvita did not qualify as food-stuff under entry 6 but rather fell under the residuary entry.

The opponent, M/s. Gokaldas Trading Co., argued that Bournvita was not commonly understood as food and was primarily recommended for specific groups like convalescing patients, nursing mothers, and elderly individuals. They contended that the term "food-stuff and food provisions" should be interpreted restrictively based on a previous court decision. On the other hand, the State argued that Bournvita was advertised as a valuable food product and contained ingredients that qualified it as an article of food under entry 6.

The Court analyzed the nature of Bournvita, which was described as a food drink made of various ingredients and recommended for nourishment. However, it noted that there was no evidence presented to support the claim that Bournvita was a substitute for food or commonly consumed as food. Referring to a previous court decision involving a similar product, the Court emphasized that the common understanding of an article as food in everyday language determines its classification under the relevant entry.

Based on the interpretation of the term "food-stuff and food provision" and the precedent set by previous judgments, the Court concluded that Bournvita did not qualify as food-stuff or food provision under entry 6 of Schedule III. It determined that Bournvita, despite being a food drink, was not consumed as a substitute for food by common people and therefore fell under the residuary entry 13 of Schedule III. The judgment favored the assessee, and no costs were awarded in the reference.

In conclusion, the Court's decision clarified the classification of Bournvita under the Gujarat Sales Tax Act, emphasizing the common understanding of an article as food in determining its tax treatment under the relevant entry of the Schedule.