1991 (2) TMI 382 - HC - VAT and Sales Tax

Summary

Issues:
1. Classification of 'burfee' as a milk product for sales tax exemption.
2. Classification of 'muthri' as bread for sales tax exemption.

Analysis:
The appellant, a halwai dealing in sweetmeats, claimed sales tax exemption for 'burfee' under entry 12 of the Bengal Finance (Sales Tax) Act, 1941, and for 'muthri' under entry 3 of the same Act. The Sales Tax Officer rejected the claim, leading to appeals. The Tribunal, noting undisclosed ingredients of 'burfee', denied the milk product classification and rejected the exemption for 'muthri'.

Regarding the first issue, the Court referred to a precedent establishing ice cream as a milk product and applied it to 'burfee'. The appellant argued that 'burfee', primarily made from milk, should be considered a milk product despite additional ingredients. The Court agreed, emphasizing the common understanding in commercial circles and ruling in favor of the dealer.

On the second issue, the Court found 'muthri' could not be classified as bread for sales tax exemption. It highlighted the common parlance interpretation, distinguishing the preparation and sale of 'muthri' by halwais from traditional bread made by bakers. Consequently, the Court ruled in favor of the department on this issue.

In conclusion, the Court decided in favor of the dealer for the classification of 'burfee' as a milk product, aligning with precedent and common understanding. Conversely, 'muthri' was not considered bread for sales tax exemption due to differences in preparation and sale practices. The judgment clarified the applicability of the 1975 Act's changes and disposed of the petition without costs, answering the reference questions accordingly.