1992 (5) TMI 183 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Entitlement to the benefit of Entry 50 of Schedule 'B' of the Punjab General Sales Tax Act, 1948.
2. Interpretation of the term "exclusively" in Entry 50 and Entry 72 of Schedule 'B'.
3. Judicial conflict between the judgments in Shiv Ram's case and Deluxe Dhaba's case.

Detailed Analysis:

1. Entitlement to the Benefit of Entry 50 of Schedule 'B':
The respondent-dealer, engaged in the sale of sweetmeats and other halwai preparations, claimed exemption under Entry 50 of Schedule 'B' of the Punjab General Sales Tax Act, 1948. The Assessing Authority denied this exemption, concluding that the respondent was running posh restaurants rather than halwai shops. The appellate authority upheld this decision, but the Tribunal reversed it, stating that a halwai can claim exemption for articles ordinarily prepared by halwais. This exemption was not available after December 1, 1972, due to the deletion of Entry 50.

2. Interpretation of the Term "Exclusively" in Entry 50 and Entry 72 of Schedule 'B':
Entry 50 exempts "Articles ordinarily prepared by halwais" when sold by halwais exclusively. Similarly, Entry 72 exempts "Indian food preparations ordinarily prepared by tandoorwalas, dhabawalas, and lohwalas" when sold by persons running tandoors, dhabas, and lohs exclusively. The Tribunal interpreted "exclusively" to mean that the exemption applies only to the articles ordinarily prepared by halwais when sold by halwais, regardless of whether they sell other articles. This interpretation was upheld by the Full Bench, which emphasized that the word "exclusively" should be read with the word "halwai" and not with "articles."

3. Judicial Conflict Between the Judgments in Shiv Ram's Case and Deluxe Dhaba's Case:
The Full Bench noted a conflict between the interpretations in Shiv Ram's case and Deluxe Dhaba's case. In Shiv Ram's case, it was held that a halwai selling articles ordinarily prepared by halwais is exempt from sales tax, even if they sell other articles. In contrast, Deluxe Dhaba's case held that the exemption applies only if the establishment is exclusively a dhaba or tandoorwala and does not sell other items. The Full Bench resolved this conflict by overruling Deluxe Dhaba's case and approving the interpretation in Shiv Ram's case, which provides a broader scope of exemption for halwais.

Conclusion:
The Full Bench concluded that the exemption under Entry 50 is available to halwais for articles ordinarily prepared by them, even if they sell other items. The question referred was answered in the affirmative, favoring the assessee and against the department. The judgment emphasized that in cases of doubt in a taxing statute, the benefit must go to the taxpayer.