2001 (7) TMI 1270 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of whether mustard oil-cake falls under the exemption category of "sale of feed and fodder" under the Orissa Sales Tax Act, 1947.

Analysis:
The case involved a dispute regarding the classification of mustard oil-cake under the tax exemption category of "sale of feed and fodder." The Revenue initially sought a reference to the High Court for opinion on this matter, which later transformed into a tax revision due to an amendment in the relevant section of the Act. The assessing officer had assessed the sale of mustard oil-cake as taxable based on a negative clarification from the Director of Animal Husbandry and Veterinary Services, Orissa, regarding its classification as cattle feed. However, the Assistant Commissioner of Sales Tax and subsequently the Sales Tax Tribunal held that mustard oil-cake falls under the exemption category.

The crucial point of contention revolved around the interpretation of entry No. 30-D of the tax-free list, which included "oil-cake" among items exempt from tax as feed and fodder for cattle, poultry, and pig. The Court emphasized that the ordinary meaning of "feed" encompasses an allowance of provender, particularly for cattle, and noted that oil-cake, including mustard oil-cake, is a type of feed. The judgment highlighted that the entry does not restrict the class or kind of oil-cake, thus concluding that mustard oil-cake qualifies as cattle feed and is exempt from sales tax under the Act.

In a related judgment cited, the Court had previously established that oil-cake, being used as cattle feed, is exempt from sales tax under the Central Sales Tax Act when sold in the course of inter-State trade. The Court dismissed the argument raised by the State that mustard oil-cake is not necessarily used as cattle feed, emphasizing that the legal classification as "oil-cake" as cattle feed prevails over actual usage. The Court observed that sales memos indicated the sale of mustard oil-cake as cattle feed during the relevant period, further supporting its classification as such.

Ultimately, the Court held that mustard oil-cake qualifies as cattle feed and falls within the scope of entry No. 30-D of the tax-free list, thereby exempting it from sales tax under the Act. The revision was dismissed based on this determination, with both judges concurring on the decision.