2006 (12) TMI 476 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the product marketed under the brand name "golden mixture" is a food or vegetative preparation sold in air-tight containers attracting sales tax at 12.5% under entry 56 of the Kerala General Sales Tax Act, 1963.

Analysis:
The judgment addressed the question of whether the product in question, marketed as "golden mixture" and known as namkeens, falls under the category of food or vegetative preparation sold in air-tight containers for the purpose of sales tax. The petitioner argued that the product is neither a food preparation nor packed in air-tight containers. The court examined the product description, which indicated that it was a vegetative preparation made of various ingredients like moth and channa flour, potato, edible oil, salt, spices, and pulses. The court noted that the product was a fried crispy mixture suitable as a snack item, meeting the definition of food as per Webster's International Dictionary. Therefore, the court rejected the petitioner's contention that the product was not a food preparation.

Moving on to the aspect of whether the product was sold in air-tight containers, the petitioner argued that the packaging, consisting of aluminium foil with a plastic lining, did not qualify as an air-tight container. The court referred to a previous decision regarding pickles in glass bottles and emphasized that air-tight sealing prevents air from entering the packet. In this case, the packaging used by the petitioner effectively maintained the product's crispiness by preventing air from entering. The court rejected the argument that air-tight containers must be made of solid materials like glass, tin, or plastic, stating that the description in entry 56 covered all food preparations sold in air-tight containers, regardless of the material used. The court concluded that the product was indeed packed in an air-tight packet, meeting the criteria of entry 56.

In light of the above analysis, the court upheld the Tribunal's finding that the petitioner's product fell under entry 56 of the Kerala General Sales Tax Act at the relevant time. As a result, the sales tax revisions filed by the petitioner were dismissed, affirming the applicability of the 12.5% sales tax on the product marketed as "golden mixture."