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TMI Blog1995 (9) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... re second sales and if "Honeyrex" is to be treated as general goods, the turnover relating to the said sales would be attracted to tax. The said turnover will not be attracted to tax, if "Honeyrex" falls under entry 44-A of the First Schedule to the Act because, then, only first sales of"Honeyrex" in the State would be attracted to tax. The short but troublesome question in the present special appeal is whether"Honeyrex" falls under entry 44-A of the First Schedule of the Act. It is not the contention of the appellant that it could fall under any other entry in the Schedules to the Act as in force at the relevant time. The present entries 44 and 44-A in the First Schedule were introduced by Act 49 of 1976 with effect from September 1, 1976, in the place of the earlier entry 44 which was as follows: "44. Milk foods and powder and baby milk food excluding fresh milk." In view of this and in view of the wording of entry 44-A, it is necessary to read the two entries, as they exist now, together. They are as follows: "44. Milk foods and powders such as Horlicks, Viva and the like condensed milk, baby milk and baby foods. 44-A. All other foodstuffs or products, whether used as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration was whether "Honeyrex" was misbranded honey and whether on account of sale of such a product there was any violation of the provisions of the Prevention of Food Adulteration Act and that the said decisions would not be helpful to resolve the question at issue before him. He disagreed with the decision of the Tribunal in T.A. No. 546 of 1986 (1985?) dated May 1, 1986 that "Honeyrex" would fall under entry 44-A and in his view the said decision would not bind him in view of the fact that the appeal against his order under section 20 of the Act would lie to the High Court and he was not subject to the jurisdiction of the Tribunal and, therefore, not subordinate to the Tribunal. The reasons given by him for holding that "Honeyrex" is not attracted by entry 44-A of the First Schedule to the Act are as follows: "However, the question here is whether it can still be considered as a 'foodstuff' similar to Bournvita, Ovaltine, etc. A mere assertion that it is a combined food product is not sufficient to bring it within the range of commodities described in entry 44-A. The foodstuffs described in entry 44-A are such that they are similar in all respects to Bournvita, Ovaltine, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... products like Bournvita, Ovaltine, Ragimalt, Boost and the like in entry 44-A is only to illustrate and exemplify the expression "beverage" and not "foodstuffs or products". He points out that undisputedly Honeyrex is made of honey, glucose and sucrose and that it is a combined food product and that it can be taken straight or mixed with any other food product or beverage and that though it is not a beverage by itself like Bournvita, Ovaltine, Ragimalt, Boost and the like, it is certainly a food product and therefore is attracted by entry 44-A and that argument to the contra has no merit. On the other hand, the learned Assistant Government Pleader for Commercial Taxes, Mr. Bhaskara Reddy, urges that the stand taken by the Commissioner has to be upheld on a harmonious and reasonable interpretation of entry 44-A as juxtaposed to entry 44 in Schedule I. He emphasises the words "all other " preceding the words "foodstuffs or products" and contends that they indicate and signify that entry 44-A cannot be read in isolation but has to be read along with entry 44 and that in that context the words "foodstuffs or products" have to be given a restricted meaning, their width and content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expressions"foodstuff" and "food", the learned Judge observed: "So far as 'food' is concerned, it can be used in a wide as well as a narrow sense and, in my opinion, much must depend upon the context and background" and after considering various decisions, he concluded as follows: "Now the comparison of one Act with another is dangerous, especially when the Act used for comparison is an English Act and a wartime measure, and I have no intention of falling into that error. I am concerned here with the Act before me and must interpret its provisions uninfluenced by expressions, however similar, used in other Acts. I have referred to the cases discussed above, not for purposes of comparison but to show that the terms 'food' and 'foodstuffs' can be used in both a wide and a narrow sense and that the circumstances and background can alone determine which is proper in any given case." (Emphasis supplied). The full width and amplitude of the expression "foodstuff" is reached in Sat Pal Gupta v. State of Haryana AIR 1982 SC 798 decided by the Supreme Court under the Essential Commodities Act, 1955. Chief Justice Y.V. Chandrachud held in that case as follows: "The word 'foodstuffs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule 8 of the Central Excise Rules, 1944, as follows: "...............In this case, therefore, it is necessary to endeavour to find out the true intent of the expressions 'food products and food preparations', having regard to the object and the purpose for which the exemption is granted bearing in mind the context and also taking note of the literal or common parlance meaning by those who deal with those goods, of course bearing in mind, that in case of doubt only it should be resolved in favour of the assessee or the dealer avoiding, however, an absurd meaning. Bearing the aforesaid principles in mind, in our opinion, the Revenue is right that the non-alcoholic beverage bases in India cannot be treated or understood as new 'nutritive material absorbed or taken into the body of an organism which serves for the purpose of growth, work or repair and for the maintenance of the vital process' and an average Indian will not treat non-alcoholic beverage bases as food products or food preparations in that light." (Emphasis* supplied). Approaching the question from the angle of the intention of the law-maker, the Supreme Court further held as follows: "...............According to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oodstuff or product" are used keeping in view that the object and intendment of the Act is to tax sale or purchase of the goods and that at the relevant time general goods were subject to multiple point tax-at present no goods are subject to multiple point tax after the introduction of the Seventh Schedule to the Act by Act No. 22 of 1995, with effect from April 1, 1995. Firstly, we have to notice that the words "all other " indicate and signify that entry 44-A cannot be read in isolation but has to be read along with entry 44; more so when, as pointed out by us earlier, they were both substituted together by amending Act 49 of 1976 in the place of the pre-existing entry 44. In the context they occur it is obvious that the said words take in only foodstuffs or products consumed by human beings. Secondly, we notice that reading entry 44-A as a whole the words "all other foodstuffs or products" do not stand by themselves, but are qualified in three ways,- (i) whether used as such or after mixing them with any other foodstuff or beverage; (ii) when sold in sealed or tinned containers; and (iii) such as Bournvita, Ovaltine, Ragimalt, Boost and the like. In our view, these three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... included within the meaning of the words 'all domestic animals'." We may usefully refer to the following observations of a Division Bench of the Orissa High Court in Foremost Dairies Limited v. State of Orissa [1993] 88 STC 535, with which we agree: "The use of the expression 'such as' has to be read in the context in which it is used. Where divergent articles are indicated, the situation may be different from one where only similar articles are indicated. To illustrate, the case of 'food and beverages' may be taken. In rule 93-K 'food and beverages' in sealed containers such as Maltodex, Maltova, Horlicks, Viva, Complan, Bournvita, condensed milk have been indicated. They belong to a class. We have observed in the case of State of Orissa v. Jyoti Trading Company (S.J.C. No. 15 of 1987 decided on July 7, 1992) [1993] 88 STC 530 that jam, jelly, tomato sauce and squash are not covered by item 4 of rule 93-K for levy of tax at the first point of sale as they do not belong to the indicated class. The context in which the expression 'such as' is used is of vital importance. In the context of divergent articles being covered, serial 30-D of the list of goods exempted from sales tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... afford for the same. Consequently, Robinson's barley in sealed container cannot be considered to be an item of food/beverage........." This decision also supports the view we have taken. It is not contended by the learned counsel for the appellant that "Honeyrex" is akin to Bournvita, Ovaltine, Ragimalt or Boost. There can be no doubt that Honeyrex, which is honey with certain additives, is not in any way like Bournvita, Ovaltine, Ragimalt, etc. Therefore, it follows that it cannot be brought under entry 44-A. We therefore uphold the order of the Commissioner of Commercial Taxes dated October 31, 1988, and overrule the decision of the Tribunal in Sri Lakshmi Traders, Kakinada v. State of Andhra Pradesh (1987) 5 APSTJ 91. The learned counsel for the appellant did not press his further contention that the Commissioner of Commercial Taxes is bound by the decisions of the Sales Tax Appellate Tribunal and that he is subordinate to that Tribunal and that therefore he erred in not following the decision of the Tribunal in Sri Lakshmi Traders (1987) 5 APSTJ 91. Therefore it is not necessary for us to deal with that contention. In the result, the special appeal is dismissed. No cost ..... X X X X Extracts X X X X X X X X Extracts X X X X
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