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2015 (9) TMI 778 - HC - VAT and Sales TaxLevy of vat / sales tax on Ice cream - classification - covered by the term Sweet and Sweetmeats or not - Bombay Sales Tax Act, 1959 - Held that - in ordinary parlance as also considering the object of the notification entry 374, we are certain that the contention on behalf of the applicant that Ice-cream can be included within the words sweet and sweetmeats as contained in notification entry 374 cannot be accepted. - Decided against the assessee.
Issues Involved:
1. Interpretation of Schedule entry C-II-35(1) under the Bombay Sales Tax Act, 1959. 2. Applicability of Notification entry 374 issued under Section 41 of the Bombay Sales Tax Act, 1959. 3. Whether 'Ice cream' falls under the term "Sweet and Sweetmeats" for tax concession purposes. Detailed Analysis: Issue 1: Interpretation of Schedule entry C-II-35(1) under the Bombay Sales Tax Act, 1959 The court examined the language of Schedule entry C-II-35(1), which includes various items such as sweets, sweetmeats, shrikhand, basundi, doodhpak, cakes, pastries, biscuits, and ice cream, among others. The entry is divided into three distinct categories: - First Category: "Sweets and sweetmeats, including Shrikhand, Basundi, and Doodhpak." - Second Category: "Cakes, pastries, biscuits, and other confectioneries." - Third Category: "Ice cream and kulfi and non-alcoholic drinks containing ice cream or kulfi." The court emphasized that the use of semicolons and the word "and" in the entry indicates a clear separation of categories. It concluded that the first category includes Indian sweets commonly consumed in households, while the second and third categories contain items distinct from the first. Issue 2: Applicability of Notification entry 374 issued under Section 41 of the Bombay Sales Tax Act, 1959 Notification entry 374 provides a concessional tax rate for "sweet and sweetmeats" covered under Schedule entry C-II-35(1). The court had to determine whether this notification also applies to ice cream. The court held that the notification's language clearly limits the concessional tax rate to items in the first category of Schedule entry C-II-35(1), which includes sweets and sweetmeats like shrikhand, basundi, and doodhpak. Ice cream, being in the third category, does not qualify for the concessional rate. Issue 3: Whether 'Ice cream' falls under the term "Sweet and Sweetmeats" for tax concession purposes The court reviewed the historical context and legislative intent behind the entries and notifications. It noted that ice cream was historically treated as part of "sweet and sweetmeats" but emphasized that legislative amendments and the specific language of the entries have since distinguished ice cream from traditional Indian sweets. The court examined various legal precedents and arguments presented by both parties. The applicant argued that ice cream should be included under "sweet and sweetmeats" based on historical treatment and common parlance. However, the court found these arguments unpersuasive, emphasizing the importance of strict interpretation in tax exemption cases. The court also referenced several judgments, including: - Commissioner of Sales Tax vs. Kwality Frozen Foods Ltd.: This case recognized the historical treatment of ice cream but did not address the specific question of whether it falls under "sweet and sweetmeats" for tax concessions. - Commissioner of Sales Tax vs. Pure Ice-cream Company: This case dealt with whether ice cream is "cooked food" for exemption purposes, which was not directly relevant to the current issue. - Commissioner of Sales Tax vs. Mangharam and Company: This case supported the view that ice cream is not a sweetmeat, aligning with the court's interpretation. Conclusion: The court concluded that "sweet and sweetmeats" as used in Notification entry 374 do not include ice cream. Therefore, the applicant's sales of ice cream are not eligible for the concessional tax rate under this notification. The reference was answered in favor of the revenue and against the assessee, with no order as to costs.
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