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TMI Blog2012 (10) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2003 (hereinafter referred to as "the KVAT Act"), holding that fryums sold by the assessee is not pappad. 2. Since the common question of law and facts are involved in these petitions and the issue whether the fryums can be treated as pappad which falls under entry 40 of the First Schedule to the KVAT Act, all these petitions are clubbed together and disposed of by this common order. 3. The respondents-assessees are the registered dealers under the provisions of the KVAT Act and the assessee in STA No. 89 of 2009 is the manufacturer of fryums, doing business in sale of rice, soji and flour and trading of fryums and pappad. The assessees have submitted their monthly returns. The establishments of the assessees were inspected by the competent authorities and observed that the dealers are engaged in the trading of fryums along with other commodities. On physical verification of the commodities dealt, it is noticed that they are doing business in the fryums and claimed exemption for sale of fryums on the ground that the fryums are the pappad. The Deputy Commissioner of Commercial Taxes (Audit), noticing that the dealers have dealt with the fryums which are taxable under residua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority, after considering the matter in detail dismissed the appeals upholding the reassessment order passed by the assessing authority. 6. The assessees, being aggrieved by the order passed by the first appellate authority have filed the appeals in STA Nos. 1828-1863 of 2009; STA Nos. 1200-1223 of 2009 and STA Nos. 204 to 208, 304 to 308, 338 and 399 of 2008 before the Karnataka Appellate Tribunal contending that the order passed by the first appellate authority confirming the reassessment order passed by the assessing authority is contrary to law. It is further contended that the issue raised by the assessing authority is fully covered by the judgment in Shiv Shakti Gold Finger case [1996] 9 SCC 514. The fryums contain all the ingredients of pappad, but smaller in size and different shapes like mini checks, buttons, short tubes, O rings, stars and mini wheels. It is semi-cooked food. The fryums are required to be fried in the edible oil. It cannot be treated as sandige, since the sandige has different shapes and size and contain different combination of pulses. It is hard to eat and not like that of the pappad. The Appellate Tribunal relying upon the order made in STA Nos. 204-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fryums are the pappad and the issue raised is covered by the said judgment and sought for allowing the same by setting aside the order passed by the first appellate authority as well as the assessing authority. 9. The Karnataka Appellate Tribunal after considering the matter in detail, by its order dated October 30, 2008 allowed the appeals in part setting aside the reassessment order as well as the order passed by the first appellate authority and remanded the matter to the assessing authority with a direction to pass fresh reassessment order in accordance with law after giving opportunity to the assessee. The Karnataka Appellate Tribunal allowed the other two appeals filed by the assessees on the basis of the order made in STA Nos. 204-208 of 2008 and other connected cases. When the said order has been passed by the Karnataka Appellate Tribunal, the order made in STA Nos. 204-208 of 2008 is pending consideration before this court. The State Government filed these revision petitions with the following substantial question of law: "(a) Whether, on facts and circumstances of the case, can it be held that the orders dated October 30, 2008, March 30, 2010 and April 20, 2010, pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from the tax. Further, the honourable Supreme Court in a judgment reported in [2007] 7 VST 1 (SC); [2007] 11 SCC 796, in the case of Commissioner of Commercial Tax, Indore v. T.T.K. Health Care Ltd. has held that fryums are the semi-cooked food and it cannot be treated as cooked food and set aside the order passed by the Madhya Pradesh High Court and restored the order passed by the assessing authority, wherein the assessing authority held that the fryums were neither namkin nor cooked food nor pappad nor cereals, therefore, they are taxable under the residuary entry. In view of the said order, the order passed by the Karnataka Appellate Tribunal cannot be sustained and sought for allowing the revision petitions restoring the order passed by the first appellate authority. 12. On the other hand, Sri N. Venkataraman, learned senior counsel appearing for Sri K.J. Kamath and Sri T.N. Keshava Murthy appearing for the assessees argued in support of the order passed by the KAT and contended that after lapse of 8 years, the proceedings are initiated for reassessment which is barred by limitation. The assessees have not suppressed anything and they have paid the tax at the rate of one pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the KVAT Act and are liable to pay tax at the rate of 12.5 per cent. Being aggrieved by the order passed by the Advance Ruling Committee, M/s. TTK Health Care Limited who is the respondent in STRP No. 89 of 2009 filed STA No. 11 of 2007 before this court. The Division Bench of this court dismissed the appeal confirming the order passed by the Advance Ruling Authority (See T.T.K. Healthcare Limited v. Authority for Clarifications & Advance Rulings [2009] 22 VST 561). Being aggrieved by the said order, a Special Leave Petition in SLP No. 450 of 2008 was filed before the honourable Supreme Court. Subsequently, the said SLP was withdrawn with liberty to agitate the matter before the assessing authority in view of the amendment brought in by Act No. 6 of 2007 to the KVAT Act. 15. It appears that, subsequent to the order passed by the Advance Ruling Authority, the assessing authority initiated proceedings of reassessment under section 39(1) of the KVAT Act and under section 12A(1) of the Karnataka Sales Tax Act and has passed an order holding that the assessees are liable to pay tax under section 4(1)(b) of the Act. The appeal filed by the assessees before the first appellate author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f gole pappad manufactured out of maida, salt starch, pappad soda, alum and food colour from sales tax under the above notification, the Additional Commissioner by proceedings dated August 27, 1982 held that gole pappad was not covered by the notification. When the appeal came to be filed, the Sales Tax Tribunal by its order dated March 17, 1986 allowed the appeal and held that the notification would govern all varieties of pappad, whether they are circular or flat in shape consisting of all the ingredients whether it is pulses, rice, maida, etc., when the State carried the matter in revision, it came to be allowed by the High Court and it held that the appellant is not entitled to the exemption. Thus this appeal by special leave. 3. It is seen that the notification clearly mentions that the word 'pappad' has been used a genus and its species are made from pulses, rice, maida, potato, sago, etc. In the notification the words 'pappad and badi', i.e., mangori have been used while in entry No. 3 of the notification after the words 'letterhead pads' the words 'other stationery articles made of handmade paper' have been used meaning thereby that entry No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II of the 1958 Act corresponding to entry 2 of Part I of Schedule II of the 1994 Act. After hearing both the parties the learned single Judge came to the conclusion that 'fryums' are 'cooked food' liable to be assessed under entry 2, Part I of Schedule II to the 1994 Act (T.T.K. Pharma Limited v. Commissioner of Commercial Taxes [2001] 121 STC 595 (MP)). 12. In the present case we have quoted the definition of the term 'cooked food'. It is an inclusive definition. It includes sweets, batasha, mishri, shrikhand, rabari, doodhpak, tea and coffee but excludes ice cream, kulfi, ice candy, cakes, pastries, biscuits, chocolates, toffees, lozenges and mawa. That the item 'cooked food' is inclusive definition which indicates by illustration what the Legislatures intended to mean when it used the term 'cooked food'. Reading of the above inclusive part of the definition shows that only consumables are sought to be included in the term 'cooked food'. In the case of 'fryums' there is no dispute that the dough/base is a semi-food. There is also no doubt that in the case of 'fryums' a further cooking process was required. It is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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