Nanjundeshwara Mart Vs. State of Karnataka - Court Judgment

Excerpt:
- karnataka certain inams abolition act, 1977.[k.a. no. 10/1978]. section 5: [n.k. patil, j] occupancy right - petitioners application in form 1 for registration of occupancy right - rejected - tribunal observed that brother of petitioner who was the inamdar of said lands earlier filed application for registration of occupancy right which was rejected and occupancy right granted in favour of tenant - also observed that against this order writ petition also was filed which was rejected confirming order granted in favour of tenant - held, tribunal has granted sufficient opportunity to petitioner to establish that lands in question has fallen to his share and his name entered in records of right and paid land revenue. his brother has in earlier proceedings admitted that the said lands were being cultivated by tenant. land tribunal had already ordered registration of the name of tenant which has attained finality. claim of petitioner rejected. - the spices (forward contracts prohibition) order, 1944, clearly fell within the ambit of the rule. in view of the purpose of the legislation, which was to conserve the health of the british people and to ensure that the purpose was not defeated, the definition was given a wide meaning so as to include not only foodstuffs strictly so called but also ingredients which ultimately enter into its preparation.k.b. navadgi, j. 1. these revision petitions are under section 23 of the karnataka sales tax act, 1957 (hereinafter referred to as 'the act' for short). 2. the question of law formulated by the petitioner is : 'whether idli instant mix, vada instant mix and jamoon instant mix sold by the assessee in cartons can be considered as food under entry 98 of the second schedule to the karnataka sales tax act, 1957 ?' 3. the record is examined. sri s. g. shivaram, the learned counsel for the petitioner, and the learned high court government pleader for the respondent are heard. 4. the facts leading to the institution of the revision petitions lie in a short compass. briefly stated, they are as under : the petitioner-assesses is a dealer under the provisions of the act. he deals in general goods and toilet articles. the assessment years are 1978-79 and 1979-80. on the taxable turnover returned by the assessee for the assessment years 1978-79 and 1979-80, showing the sale turnover of idli instant mix, vada instant mix and jamoon instant mix sold in packages of rs. 54,000, the additional commercial tax officer, davangere (the assessing authority) levied tax at the rate of 4 per cent under section 5(1) of the act treating the goods sold by the asessee as non-schedule goods. later on, the assessing authority found that the levy of tax at the rate of 4 per cent under section 5(1) of the act on the sale of goods in question was incorrect and that the goods were taxable at 8 per cent under entry 98 of the second schedule to the act. having concluded that the turnover of the assessee in respect of the assessment years in question in relation to the goods had escaped assessment to tax, the assessing authority issued a notice to the assessee on april 6, 1981, under section 12-a of the act proposing the levy of tax at 8 per cent and inviting objections, if any, for the proposed rate of tax. the assessee received notice on april 22, 1981 and filed objections on april 30, 1981. he contended that the idli instant mix, vada instant mix and jamoon instant mix (hereinafter referred to as 'the goods in question') were not 'food' within the meaning of the expression in entry 98 inasmuch as they cannot be consumed as food ready at the table without being subjected to further process. he, in support of his contention, relied upon an order dated november 28, 1990, passed by the assistant commissioner of commercial taxes (appeals), bangalore division, bangalore, in the case of one bhavani foods (p) ltd. v. assistant commercial tax officer, viii circle, bangalore, in a.p. no. 303/80-81. the assessing authority took the view that the goods in question were really food within the meaning of the expression in entry 98 and that the fact that they were to be processed further to make them ready for consuming would not deprive them the characteristics of food. he referred to the meaning of the term 'food' as given in webster's dictionary and the decisions in [1965] 16 stc 931 (cal) (santosh kumar ghosh v. commercial tax officer) and [1968] 21 stc 309 (mp) (commissioner of sales tax v. shri ballabhdas ishwardas) and concluded that the contention raised by the assessee was required to be repelled. he held that the goods in question were taxable under entry 98 of the second schedule to the act. in the view he took, by the order dated may 12, 1981, he held that the tax leviable on the goods in question sold during the assessment year 1978-79 including additional tax and surcharge would be rs. 1,296. as regards the assessment year, 1979-80, he held that the tax leviable on the sale of goods of rs. 54,600 including the additional tax and surcharge would be rs. 5,240. in view of his order, he directed the issue of revised demand notice. the assessee, feeling aggrieved by the order made by the assessing authority, preferred appeals to the deputy commissioner of commercial taxes (appeals), bangalore division, bangalore, in kst ap. nos. 86 and 87/81-82. the first appellate authority, by the order dated march 24, 1982, rejected the contention of the assessee taken by him before the assessing authority and reiterated before it (the first appellate authority), upheld the assessment orders and dismissed the appeals. the assessee carried the matter in sta. nos. 545 and 546/82 to the karnataka appellate tribunal, bangalore (the tribunal). the tribunal, on examination of the material, held that the appeals were without substance. it, therefore, confirming the orders of the assessing authority and the first appellate authority, dismissed the appeals. raising the question of law, extracted earlier, the assessee has come before this court with these revision petitions. 5. there is no dispute that the assessee sells the goods in packages made of polythene in the form of small bags firmly stitched at the openings. the learned counsel for the petitioner produced before us one such bag for our examination. 6. entry 98 of the second schedule to the act reads : '98. tinned, canned and bottled foods and fruits 8 per cent.'including foods and fruits packed in sealedcontainers.7. it can be said that the assessee did not sell the goods either in tins or in cans or in bottles. 8. but can it be said on the admitted facts that the goods the assessee has sold had been sold in a packed condition packed in sealed containers. 9. in commissioner of sales tax v. g.g. industries , the question as to what meaning should be given to the expression 'sealed container' that appeared in clause (2) of the notification no. s.t. 118/x-929-48 dated june 7, 1948, issued by the governor in exercise of the powers conferred by section 4 of the u.p. sales tax act, 1948, came up for consideration before the honourable supreme court. clause (2) of the notification had exempted from sales tax 'dealers in cooked food (other than cooked food sold in sealed containers) including sweetmeats and other confectionery' on certain conditions. the assessee-firm, which carried on the business of the manufacture and sale of confectionery such as chocolates, lollipops, lemondrops, etc., had sold the confectionery in packings of tins and cardboard which had been closed by the use of cellophane paper to protect the contents from being affected by the atmosphere. the assessee had contended that the sales of confectionery were exempt from sales tax under the notification on payment of the prescribed fee. but the sales tax officer had rejected the claim on the ground that the confectionery had been sold in sealed containers. on a reference, the high court had held that the turnover representing the sale of confectionery by the assessee was not the turnover of confectionery sold in sealed containers. on appeal to the supreme court, it was held that the packets sold by the assessee fell within the expression 'sealed containers' within the meaning of the notification. holding that the expression 'sealed container' means a container which is 'so closed that access (to the contents) is impossible without breaking the fastening', one of the meanings given to the word 'sealed' in the shorter oxford english dictionary, the supreme court held in the context in which the expression 'sealed container' was used in the notification, it would be difficult to give to the expression 'sealed container' a meaning different from the ordinary dictionary meaning. 10. we have examined the jamoon instant mix packet in a polythene bag produced for our inspection. we have found the bag stitched firmly at the openings. we have found the bag so closed that it is impossible to have access to the contents without breaking the fastening. we, therefore, hold that the goods sold by the assessee during the relevant assessment years were goods sold in a packed condition packed in sealed containers. 11. the next question for consideration is, whether the goods in question can be said to be 'food' within the meaning of the expression in entry 98 of the second schedule. 12. in state of bombay v. virkumar gulabchand shah : 1952crilj1406 , the question before the supreme court was, whether turmeric was a foodstuff within the meaning of clause 3 of the spices (forward contracts prohibition) order, 1944, read with section 2(a) of the essential supplies (temporary powers) act, 1946. rule 81(2) of the defence of india rules was wide and all embracing. the spices (forward contracts prohibition) order, 1944, clearly fell within the ambit of the rule. one of the purposes of the said order, as disclosed in its preamble, was 'to maintain supplies essential to the life of the community'. in other words, it was considered as essential commodity and not a luxury which in times of austerity could be dispensed with. 13. to decide the question, the supreme court referred to the definition of the word 'foodstuff' given in the oxford english dictionary : 'that which is taken into the system to maintain life and growth and to supply waste of tissue'; to the definition of the word 'food' in webster's international dictionary where 'food' is defined as : 'nutritive material absorbed or taken into the body of an organism which serves for purposes of growth, work or repair and for the maintenance of the vital processes'; to the explanation that follows the definition : 'animals differ greatly from plants in their nutritive processes and require in addition to certain organic substances (water, salts, etc.) and organic substances of unknown composition (vitamins) not 'ordinarily' classed as foods ('though absolutely indispensable to life' and contained in greater or less quantities in the substances eaten) complex organic substances which fall into three principal groups, proteins, carbohydrates and fats'; and to the special definition of the term 'food' for legal purposes, namely - 'as used in laws prohibiting adulteration, etc., 'food' is generally held to mean any article used as food or drink by man whether simple, mixed or compound, including adjuncts such as condiments, etc., and often excluding drugs and natural water.' 14. the supreme court also referred to the definition of the expression 'foodstuff' given in webster's international dictionary as : '1. anything used as food. 2. any substance of food value as protein, fat, etc., entering into the composition of a food.' and observed that 'foodstuff' had no special meaning of its own and that it merely carries back to the definition of 'food' because 'foodstuff' is anything which is used as 'food'. 15. the supreme court referred to certain english decisions cited before it for consideration. in san jose, cometa (1917) 33 tlr 12, sausage skins - the envelope in which sausage meat is usually contained - were held to be foodstuffs. that was a case of conditional contraband captured during the war in pursuance of a war-time measure and the decision had been given in accordance with international law and on the basis of which the law of contraband had been founded. james v. jones (1894) 1 qb 304 was a case of baking powder. it was held that baking powder is an article of food within the meaning of the english sale of food and drugs act, 1875. the object of the said act was to prevent the adulteration of food with ingredients which are injurious to health. in view of the purpose of the legislation, which was to conserve the health of the british people and to ensure that the purpose was not defeated, the definition was given a wide meaning so as to include not only foodstuffs strictly so called but also ingredients which ultimately enter into its preparation. in hinde v. allmond (1918) 87 ljkb 893, the question was, whether 'tea' was an article of 'food' within the meaning of an order designed to prohibit the hoarding of food, namely, the food hoarding order of 1917. the learned judges held it was not. the food hoarding order had not specified tea or indeed any other article. the background and the reasons given for the decision would show that a narrow meaning was given to the expression 'article of food'. in sainsbury v. saunders (1919) 88 ljkb 441, darling and avory, jj, who were parties to the decision in hinde v. allmond (1918) 87 ljkb 893, took different views. avory, j., held that 'tea' was an article of food for the purposes of the defence of the realm regulations, while darling, j., adhered to his earlier view. salter, j., who was not a party to the earlier decision in hinde v. allmond (1918) 87 ljkb 893, was of the same opinion as avory, j. 16. the supreme court in para 23 of the judgment on page 338 of air made it clear that the reference to the cases discussed was not for purposes of comparison but to show that the terms 'food' and 'foodstuff' can be used in both a wide and narrow sense and that the circumstances and background can alone determine which is proper in any given case. 17. adverting to the history of the legislation, one of the purposes of the order under consideration as disclosed in its preamble, the supreme court held that turmeric was a 'foodstuff' in its wider meaning and a commodity essential to the life of the community. 18. in nathuni lal gupta v. state : air1964cal279 dealing with the question as to whether wheat and wheat products were food and as such essential commodity within rule 35(5) of the defence of india rules, 1962, the high court of judicature at calcutta held that there was practically no distinction between the meaning of the word 'food' and 'foodstuff'; that 'foodstuff' has no special meaning of its own and that a thing may be food or foodstuff even if not directly consumed and has no nutritive value but is only used for culinary purposes in the preparation of food. as regards wheat and wheat products, the high court held that there was no room for doubt that they were food even if they were not consumed as they were, but had to be cooked or had to undergo some mechanical process before the same were ready for consumption. 19. in patna municipal corporation v. dularchand sao : air1964pat565 , the question that was considered was as to whether an article to constitute food within the definition of the term given in section 2(v) of the prevention of food adulteration act, 1954, must be usable as food. the high court held, in view of the definition of 'food' in section 2(v) of the prevention of food adulteration act, the court was not concerned with the actual use to which the article in question may be put and that to constitute food for the purposes of the said act it was enough that the article in question is usable as food or drink for human consumption. 20. in commissioner of sales tax v. sunhari lal jain [1975] 35 stc 425, the question that fell for consideration was, whether hot tea was a cooked food within the meaning of the u.p. sales tax act (15 of 1948). the allahabad high court held that in its primary sense food is a thing taken into the system as nourishment and not merely as a stimulant; that tea is used primarily as a stimulant and is never taken for the purpose of nourishment and that, therefore, tea cannot be included in the term 'food'. the expression 'cooked food' had not been defined in the u.p. sales tax act or the rules made thereunder. the high court held that 'cooked food' was a word of every day use and that it must be construed in its popular sense meaning that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it. 21. in vimala cold storage v. state of kerala [1976] 38 stc 217, items 23 and 25 of the schedule i of the appendix to a notification issued in exercise of the powers conferred by section 10 of the kerala general sales tax act, 1963, had exempted from payment of sales tax 'fresh fish' and 'meat except meat which is cured or frozen', respectively. the question was, whether meat and fish preserved in cold storage by refrigeration would be entitled to the exemption. it was held that 'fresh fish' would be entitled to the exemption under the notification and that 'meat' kept in cold storage where the temperature would come to a minimum of 0 degree c for the purpose of preserving the same by refrigeration would come within the expression 'meat which is frozen' and would, therefore, be not entitled to the exemption under the notification. 22. in state of andhra pradesh v. vayugundla venkata subbaiah & sons the question under consideration was, whether 'ravva' was 'rice' within the meaning of entry 66 of the first schedule to the andhra pradesh general sales tax act, 1957, as it stood at the material time. it was held that it was 'rice' and, therefore, sale of 'ravva' constituted second sale and was exempt from tax. 23. in commissioner of sales tax v. regal dairy [1981] 47 stc 374 (mp), it was held that 'mawa', an ingredient used for preparation of other sweets, was a 'cooked food'. 24. the word 'food' is not defined in the act or in the rules made thereunder. in this situation, the expression has to be understood in the sense it has in common parlance and in its popular meaning as understood by people. 25. but before dilating on this matter, we propose to examine the dictionary meaning of the word 'food'. in webster's third new international dictionary and seven language dictionary, the word 'food' is defined as : 'food''fud sometimes'fud n - s often attrib (me fode, fr. oe foda; akin to oe fodor, foddor food, fodder, oh g fuotar food, fodder, on fae tha, fea thi food, father fodder, goth fodeins food, l pabulum food, fodder, panis bread, passer to pasture, feed, graze, gk pateisthai to eat, oslav pasti to graze) 1a : material consisting of carbohydrates, facts, proteins, and supplementary substances (as minerals vitamins) that is taken or absorbed into the body of an organism in order to sustain growth, repair, and all vital processes and to furnish energy for all activity of the organism ; esp : parts of the bodies of animals and plants consumed by animals : provender, provisions, viands - compare metabolism, nutrition b : simple inorganic substances that are absorbed by plants in gaseous form (as carbon dioxide) or in solution in water (as nitrates, phosphates) : plant nutrients c : complex organic substances constructed within the bodies of green plants by photosynthesis or other processes for use directly as building material and as source of energy for growth and reproduction 2a : nutriment in solid form - opposed to drink b : the chief substance of regularly taken meals as distinguished from candy, appetizers, or condiments 3a : something that nourishes or develops or sustains b : something that supplies a process or activity for thought 4. obs : the act of eating 5. foods pl : stocks or bonds of food companies.' 26. according to chambers' 20th edition dictionary, 'food' means 'what one feeds on; that which, being digested, nourishes the body; whatever sustains or promotes growth'. 27. we were told that the jamoon instant mix sold by the assessee contains 'maida, ghee or refined oil' and all that is required to make it ready for consumption would be to mix the same with water to prepare balls, roast them either in ghee, oil or vanaspati and keep them in solidified liquid containing high percentage of sugar. idli instant mix contains rice ravva. to make it ready for consumption, it has to be mixed with water to convert it into a paste, prepare cakes and subject the cakes to heating process in a vessel meant for the purpose or in a designed container. vada instant mix contains 'uridal' flour. it has to be mixed with water to convert it into a soft paste, prepare the paste into cakes and then roast the cakes either in ghee, refined oil or vanaspati to make it ready for consumption. 28. having regard to the definition of 'food' given in the chambers' 20th edition dictionary, webster's third new international dictionary and the shorter oxford english dictionary, the contents of the goods in question and the process required to make them ready for consumption, we have no doubt in our mind that they are food within the meaning of entry 98 of the second schedule to the act. the idea behind the preparation of instant mixes appears to be to cut short the time taken in the process of preparing and cooking the items concerned to the barest minimum and to provide instant food if the exigencies of circumstances so require. the contents of the goods in question sold by the assessee would be food after undergoing preparation mid-way with the addition of some other ingredient/s and process of roasting/heating. the only preparation left in respect of the goods in question to make them ready for consumption would be, mixing, roasting, heating, etc., as the case may be. 29. the same conclusion is inevitable when we consider the object of the act and the purpose of including foods and drinks, tinned, canned or bottled and foods and fruits packed in sealed containers in entry 98 of the second schedule to the act. we are concerned with the meaning of the expression in an entry of a taxing statute the language of which is clear with no scope for ambiguity or doubt. 30. in the background and context, in our opinion, the goods in question would constitute food in its primary and narrow meaning - articles eaten as food for purposes of nutrition and nourishment. they also constitute food in its wider sense - everything that goes into the preparation of food proper as understood in the narrow sense, i.e., food eaten for purposes of nutrition or nourishment, to make it palatable and digestable. the popular meaning of the word 'food' is in its wider sense and it is in that sense the word 'food' is understood in common parlance. our decision, in our opinion, accords with the meaning of the term in common parlance and popular sense. 31. in the result, for the reasons aforesaid, we answer the question of law raised by the assessee in the affirmative and against him and in favour of the revenue. we affirm the order made by the assessing authority holding that the turnover of the sales of goods in question would fall under entry 98 of the second schedule to the act and would be exigible to tax at the rate of 8 per cent, maintained by the first appellate authority and the tribunal. 32. we dismiss the revision petitions with no order as to costs. 33. petitions dismissed.