1962 (2) TMI 57 - SC - VAT and Sales Tax

Whether the petitioner was entitled to exemption under Notification No. 5564 Ft., dated 30th March, 1949, issued under section 6 of the Bihar Sales Tax Act, 1947, with regard to the sales of the preparations of meat and fish, e.g., meat curry and fish curry served as separate dishes, or as part of the menu, at lunch or dinner, at the petitioner s premises or outside? Held that - We do not, however, wish to express our opinion in this case with regard to the question whether the expressions meat and fish in the notification of the State Government dated the 30th March, 1949, under section 6, includes boiled meat or boiled fish and not merely raw meat and raw fish. The petitioner has already obtained a decision in his favour from the Board on this point and it is not necessary for us to express an opinion as to whether the decision of the Board of Revenue is correct or otherwise. For the reasons we have already stated we consider that the question as reframed by us should be answered against the assessee and in favour of the State of Bihar in the manner we have already indicated.

Issues Involved:
1. Legality of taxing the appellant on gross turnover instead of 66 2/3% as per the 1945 agreement.
2. Bona fide belief in the continuation of the 1945 arrangement.
3. Challenge to the continuation of the arrangement by the Department.
4. Entitlement to deduction on the sale of meat and fish under the 1949 notification.
5. Interpretation of meat and fish cooked in different ways under the 1949 notification.
6. Distinction between different preparations of meat and fish under the 1949 notification.

Issue-Wise Detailed Analysis:

1. Legality of Taxing the Appellant on Gross Turnover Instead of 66 2/3% as per the 1945 Agreement:
The appellant, a railway caterer, argued that the Bihar Government had agreed in 1945 to assess his taxable turnover at 66 2/3% of the gross turnover due to difficulties in maintaining separate accounts for taxable and non-taxable items. The Sales Tax Officer, however, taxed him on the total gross turnover for the year 1950-51, except for a usual rebate of 4%. The appellant contended that this included tax-free articles and claimed an excess assessment of Rs. 11,416-15-0. The Board of Revenue upheld the assessment on gross turnover, and the appellant's revision petition was unsuccessful.

2. Bona Fide Belief in the Continuation of the 1945 Arrangement:
The appellant argued that the Member, Board of Revenue, acknowledged his bona fide belief that the 1945 arrangement would continue. However, the Board held that this belief did not entitle him to be assessed under the said arrangement. The High Court did not entertain this argument, indicating that the appellant could not rely on the arrangement for the assessment year in question.

3. Challenge to the Continuation of the Arrangement by the Department:
The appellant contended that the Department could not challenge the arrangement's continuation, especially since the State Government's actions or omissions misled him into maintaining accounts in a manner prejudicial to his claim for deductions. The Board of Revenue and the High Court did not find merit in this argument, and the appellant's claim was rejected.

4. Entitlement to Deduction on the Sale of Meat and Fish under the 1949 Notification:
The appellant claimed entitlement to deductions for the sale of meat and fish under Notification No. 5564 Ft., dated 30-3-49, issued under section 6 of the Bihar Sales Tax Act, 1947. The Board of Revenue referred the question of which forms of meat and fish were covered by the notification to the High Court. The High Court reframed the question and ruled against the appellant, stating that cooked meat and fish were not exempt from tax under the notification.

5. Interpretation of Meat and Fish Cooked in Different Ways under the 1949 Notification:
The High Court interpreted the notification to mean that only raw meat and fish, and boiled meat and fish meant for sale or consumption outside the appellant's premises, were exempt from tax. Cooked meat and fish served at the appellant's premises or as part of a menu were not covered by the exemption. The High Court emphasized that the notification's historical context, including a previous notification from 1947, indicated that cooked food was not intended to be exempt from tax.

6. Distinction Between Different Preparations of Meat and Fish under the 1949 Notification:
The High Court concluded that the expressions "meat" and "fish" in the 1949 notification did not include cooked meat or fish. The omission of "cooked food" from the list of exempted goods in the 1949 notification was significant and indicated that the State Government did not intend to exempt cooked food from tax. The appellant's claim for exemption on sales of meat curry and fish curry served as separate dishes or as part of a menu was, therefore, rejected.

Conclusion:
The Supreme Court dismissed the appeal, upholding the decisions of the Board of Revenue and the High Court. The appellant was not entitled to be assessed at 66 2/3% of the gross turnover, nor was he entitled to exemptions for cooked meat and fish under the 1949 notification. The appeal was dismissed with costs.

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