2007 (9) TMI 546 - HC - VAT and Sales Tax

Taxability of cattle feed - Held that - Turnover of cattle feed was exempted from tax during the year under consideration. Order of the Tribunal is accordingly, set aside. Revision allowed.

Summary

Issues Involved: Taxability of cattle feed, interpretation of "cattle fodder" under the U.P. Trade Tax Act, 1948, applicability of specific notifications and judicial precedents.

Issue-wise Detailed Analysis:

1. Taxability of Cattle Feed:
The primary issue in the revisions was the taxability of cattle feed sold under the name "Parag Pashu Aahar." The Tribunal upheld the assessing authority's view that this product should be taxed as an unclassified item. The applicant contested this, arguing that "Parag Pashu Aahar" should be considered cattle fodder and thus be exempt from tax under the relevant notification.

2. Interpretation of "Cattle Fodder":
The applicant argued that "Parag Pashu Aahar" falls within the definition of cattle fodder and should be exempt from tax. The relevant notification No. ST-II-3714/x-6(1)/85-U.P. Act 15/48, dated June 5, 1985, was cited, which includes various items under cattle fodder but excludes oil-cake, rice polish, rice bran, or rice husk. The applicant relied on judicial precedents, including Omrao Industrial Corporation (Pvt.) Ltd. v. Sales Tax Officer and Glaxo Laboratories (India) Ltd. v. State of Gujarat, which supported the broader interpretation of cattle fodder to include cattle feed.

3. Applicability of Specific Notifications:
The applicant highlighted that cattle feed was specifically excluded from cattle fodder only with effect from October 10, 1994, by Notification No. TT-II-3401. Therefore, for the assessment years 1986-87, 1987-88, and 1993-94, cattle feed should be considered part of cattle fodder and exempt from tax. The applicant also referenced the Supreme Court's decision in Commissioner of Sales Tax v. Ram Chandra Asha Ram, which supported the view that cattle fodder includes everything fed to cattle, including items like damaged wheat.

4. Judicial Precedents:
Several judicial precedents were cited to support the applicant's contention:
- Omrao Industrial Corporation (Pvt.) Ltd. v. Sales Tax Officer: Defined cattle fodder broadly to include cattle feed.
- Glaxo Laboratories (India) Ltd. v. State of Gujarat: Detailed the meaning of cattle feed and its importance in livestock nutrition.
- Sree Ramakrishna Cattle-feed Manufacturers v. Commercial Tax Officer: Held that mixtures used as cattle feed fall within the ambit of cattle fodder.
- C. Rathinam v. State of Tamil Nadu: Similar to the above, supported the inclusion of mixed feed under cattle fodder.
- Ram Chandra Asha Ram v. Commissioner of Sales Tax: Affirmed by the Supreme Court, held that cattle fodder includes all items fed to cattle unless specifically excluded.

5. Tribunal's Order and Its Set Aside:
The Tribunal's order was set aside because it did not consider the broader interpretation of cattle fodder supported by judicial precedents and the specific exclusions made only after October 10, 1994. The decisions of the learned single judge in Commissioner of Sales Tax v. Cattle Feed Plant, Meerut, were deemed inapplicable as they did not consider the relevant notification and the Supreme Court's decision in Ram Chandra Asha Ram.

Conclusion:
The High Court concluded that the turnover of cattle feed was exempt from tax during the years under consideration. The Tribunal's order was set aside, and all revisions were allowed in favor of the applicant.