1991 (1) TMI 417 - HC - VAT and Sales Tax

Summary

Issues involved:

1. Whether idli instant mix, vada instant mix, and jamoon instant mix sold by the assessee can be considered as food under entry 98 of the Second Schedule to the Karnataka Sales Tax Act, 1957.
2. Whether the goods sold in polythene bags can be considered as packed in sealed containers under entry 98 of the Second Schedule to the Act.

Issue-wise detailed analysis:

1. Classification of Instant Mixes as Food under Entry 98:

The primary issue is whether the instant mixes (idli, vada, and jamoon) sold by the assessee qualify as "food" under entry 98 of the Second Schedule to the Karnataka Sales Tax Act, 1957. The assessee argued that these mixes are not "food" as they require further processing before consumption. The assessing authority, however, held that these mixes are indeed "food" within the meaning of entry 98, stating that the need for further processing does not change their fundamental nature as food.

The court examined various definitions and judicial precedents to interpret the term "food." It referred to the definitions in Webster's Dictionary and the Shorter Oxford English Dictionary, which describe food as any material consumed for growth, work, repair, and maintenance of vital processes. The court also considered precedents such as the Supreme Court's decision in State of Bombay v. Virkumar Gulabchand Shah, which emphasized a broad interpretation of "food" to include substances used for nutrition and nourishment, even if they require additional processing.

The court concluded that the instant mixes are food in both their primary and wider meanings. They are intended for nutrition and nourishment and only require minimal preparation to be ready for consumption. Thus, the court held that the instant mixes fall under entry 98 of the Second Schedule and are taxable at 8%.

2. Goods Sold in Polythene Bags as Sealed Containers:

The second issue is whether the instant mixes sold in polythene bags can be considered as packed in sealed containers under entry 98. The court referred to the Supreme Court's decision in Commissioner of Sales Tax v. G.G. Industries, which defined a "sealed container" as one that is so closed that access to its contents is impossible without breaking the fastening.

Upon examining a sample of the jamoon instant mix packet, the court found that the polythene bag was stitched firmly at the openings, making it impossible to access the contents without breaking the fastening. Therefore, the court held that the goods sold by the assessee were indeed packed in sealed containers.

Conclusion:

The court answered the question of law in the affirmative, holding that the instant mixes sold by the assessee are food under entry 98 of the Second Schedule and are taxable at 8%. The court also held that the goods sold in polythene bags are considered packed in sealed containers. Consequently, the court dismissed the revision petitions and upheld the orders of the assessing authority, the first appellate authority, and the Tribunal.