2006 (11) TMI 581 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of tax entry for animal feed under the Karnataka Value Added Tax Act, 2003.

Analysis:
The appellant, a dealer of animal feed, challenged an order by the Authority for Clarification and Advance Ruling under the KVAT Act, which ruled that "dog feed" and "cat feed" were not exempt from tax and should be taxed at 12.5%. The appellant contended that the feeds fell under entry No. 8 and later entry No. 5 of the First Schedule of the Act, which exempted certain animal feeds. The key contention was whether "dog feed" and "cat feed" qualified as animal feed as per the relevant entries.

The Court analyzed the entries in detail, emphasizing that in a taxing statute, the entry must be read as a whole to understand the legislative intent for tax levy. The Court noted that the intention was to tax specific types of animal feed and supplements. Referring to precedents, the Court highlighted that the word "namely" in the entry restricted the scope of items included, and items not fitting the description should not be taxed under that entry.

Citing judgments such as Commissioner of Sales Tax v. Bishram Tiwari and Maharashtra Hybrid Seeds Company Limited v. State of Karnataka, the Court reiterated that the principle of ejusdem generis applied, meaning items in a list must be of the same kind or class. The Court also considered the popular meaning of terms in interpreting tax statutes and the importance of consistent departmental practice in tax exemptions.

The Court distinguished the case from precedents cited by the appellant, like Vee Nissan Electronics v. Commissioner of Central Excise, Mumbai, which dealt with a different context. Ultimately, the Court upheld the Revenue's decision, concluding that the feeds in question did not qualify for exemption under the relevant tax entry.

In light of the detailed analysis and legal principles applied, the Court rejected the appeal, affirming the Authority's order to tax "dog feed" and "cat feed" at 12.5%.