1996 (12) TMI 402 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of entry No. 5 in a notification dated 31-1-1985 regarding "Balanced Poultry Feeds."

The judgment by the Allahabad High Court, delivered by Justices Om Prakash and B.K. Sharma, addressed the issue of whether the entry No. 5 in a notification dated 31-1-1985, pertaining to "Balanced Poultry Feeds," includes poultry feed supplements or concentrates. The assessing authority had initiated recovery against the petitioner based on assessment orders for the years 1991-92 and 1992-93, contending that the petitioner dealt only in feed supplements, not in balanced poultry feeds exempt under the said notification. The court rejected the preliminary objection raised by the Standing Counsel, emphasizing that the controversy revolved around interpreting the specific entry in the notification.

In the assessment orders, the authority determined that the petitioner, a private limited company, traded in feed supplements like Vitamins A-B, B-12, C, and D, imported from outside the state, which were not considered poultry feed but rather supplements to enhance poultry health and productivity. The court analyzed the term "balanced poultry feed," highlighting that it differed from regular poultry feed and that the word "feed" was not defined in the U.P. Trade Tax Act, necessitating a dictionary interpretation. It was established that balanced poultry feed included essential concentrates and vitamins crucial for poultry maintenance and production.

The judgment delved into the significance of providing balanced poultry feed to ensure optimal poultry productivity economically. It differentiated between regular feed for maintenance and balanced feed containing vital nutrients for production purposes. The court emphasized that the inclusion of concentrates in poultry feed was essential to categorize it as balanced poultry feed, as concentrates like vitamins were integral for overall poultry health and productivity. The decision was supported by precedents from the Gujarat High Court, reinforcing the interpretation of balanced poultry feed.

Ultimately, the court ruled in favor of the petitioner, exempting the turnover of concentrates amounting to a specific sum from taxation under the category of "balanced poultry feed supplements" as per entry No. 5 in the notification dated 31-1-1985. The judgment directed the assessing authority to treat the turnover of balanced poultry feed supplements as exempt, leading to the quashing of recovery proceedings related to tax on these supplements for the relevant assessment years.