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CASE NO.: Appeal (civil)  309 of 2002

PETITIONER: Commissioner of Commercial Tax,Indore & Ors

RESPONDENT: T.T.K. Health Care Ltd

DATE OF JUDGMENT: 11/04/2007

BENCH: S.H.KAPADIA & B. SUDERSHAN REDDY

JUDGMENT: J U D G M E N T

KAPADIA, J.

       This civil appeal by grant of special leave petition  concerns classification dispute. According to the assessee  ’fryums’ fall under item No.2 of Part I of Schedule II  which refers to ’cooked food’ and in which case the rate of  tax is 4%. On the other hand, according to the  Department the item ’fryums’ falls under Part VII of  Schedule II to the M.P. Commercial Tax Act, 1994, under  which the rate of tax is 8%  (earlier it was 6%)

       The short question, therefore, which arises for  determination in this civil appeal is the meaning of the  term ’cooked food’ in M.P. Commercial Tax Act, 1994.  Though the expression ’cooked food’ has been defined  under Section 2(g) of the said 1994 Act in this civil  appeal we are concerned with the Assessment Years  1992-93 and 1993-94.  It is made clear that the assessee  is a registered dealer under M.P. General Sales Tax Act  1958 and thereafter under M.P. Commercial Tax Act,  1994. It is not in dispute that the assessee has been  assessed under the above entries of the 1994 Act.  This is  because the 1958 Act stood replaced by the 1994 Act and  the original assessment made under the 1958 Act have  been treated to have been made under the 1994 Act.                  On 12th March, 1996 the Assistant Commissioner,  Indore, assessed sale of ’fryums’ at 8% sales tax under  the residuary entry referred to above.  He demanded tax  of Rs.1.33 lakhs (rounded off) for the Assessment Years  1.4.92 to 31.3.93.  The Commissioner of Commercial Tax,  in an application made under Section 68 of the 1994 Act  held that ’fryums’ were neither  Namkeen nor  ’cooked  food’  nor ’papad’ nor ’cereals’, and therefore, they were  taxable under the above residual entry of Part VII of  Schedule II of the 1994 Act.  On 20.6.1997 the Appellate  Authority dismissed the appeal. The matter was carried  in revision. The revision was also dismissed.

       The Assistant Commissioner had assessed the sale  of ’fryums’  for the subsequent period commencing from  1.4.1993 to 31.3.1994 also under the above residuary

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entry at 8% and demanded sales tax amounting to  Rs.66,202.

       Aggrieved by the aforestated decision in respect of  the above two years the assessee moved the Madhya  Pradesh High Court in Writ Petition under Articles  226/227 of the Constitution praying for a declaration  that ’fryums’ be held as ’cooked food’ liable to tax under  Entry IV of Part I of Schedule 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.

       Aggrieved by the decision of the learned single  Judge the Department carried the matter in appeal to the  Division Bench which has confirmed the decision of the  learned single Judge.

       We quote hereinbelow Section 2(g) of M.P.  Commercial Tax Act, 1944 which defines the term  ’cooked food’ " "2(g) ’Cooked food’  includes sweets and  sweetmeats, mishri, batasha, chironji,   shrikhand, rabadi, doodhpak, prepared  tea and prepared coffee but excludes ice- cream, kulfi, ice-candy, non-alcoholic  drink containing ice-cream, cakes,  pastries, biscuits, chocolates, toffees,  lozenges, peppermint drops and mawa’

       We also quote hereinbelow item 2 of Part I of Schedule  II to the said 1994 Act which levies the rate of tax at 4%.

SCHEDULE II (Effective upto 31.12.1999) S.No.   Description of Good                 Rate of Tax Part I 1.    Unginned cotton                           4% 2.    ’Cooked food’                             4%

We also quote hereinbelow the residuary entry namely  Item 1 of Part VII of Schedule II to the M.P. Commercial Tax  Act 1994 which fixes the rate of duty at 8% (earlier 6%):

"M.P. Commercial Tax Act, 1994 S.No.   Description of Good                 Rate of Tax Part VII 1.      All  other goods not included in Schedule I  or any other part of this Schedule."

In the case of Commissioner of Sales Tax M.P., Indore  v. Shri Ballabhdas Ishwardas, Bombay Bazar, Khandwa  1968 (21) STC 309, it has been held that the term ’cooked  food’  cannot be read in a wider sense so as to include  everything made fit for eating by application of heat, boiling,  baking, roasting, grilling etc. The term is confined to these  cooked items which one generally takes at regular meal  hours.

In the case of Commissioner of Sales Tax, M.P. v.  India Coffee Workers Co-operative Society Ltd., Jabalpur,  1970(25) STC 43 the High Court has held that the term  ’cooked food’  excluded meals from description of words

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under Item 9 of Schedule I read with Section 10(1) of M.P.  General Sales Tax Act, 1959.  That, the term ’meal’ was not  defined under that Act, and therefore, one has to understand  that word in terms of common parlance and popular  meaning. It was therefore, held that supply of items like ice- cream, toast, fried eggs, vegetable and mutton cutlets did not  constitute meals though the said items were also eatables.

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 has 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 not in dispute that the ’fryums’  came in plastic bags.  These ’fryums’ were required to be fried depending on the  taste of the consumer.  In the circumstances we are of the  view that ’fryums’ were like seviyan .  ’Fryums’  were required  to be fried in edible oil.  That oil had to be heated.  There was  certain process required to be applied before ’fryums’ become  consumable.  In these circumstances the item ’fryums’ in the  present case will not fall within the term  ’cooked food’ under  Item 2 Part I of Schedule II to the 1994 Act.  It will fall  under  the residuary item "all other goods not included in any part  of Schedule I".

In the case of  Bharat Co-operative Bank (Mumbai)  Ltd. v. Co-operative Bank Employees Union 2007(5)  SCALE 57, this Court has held that when the word  ’includes’  is used in the definition, as is the case under Section 2(g) of  the 1994 Act, the legislature does not intend to restrict the  definition; it makes the definition enumerative  and not  exhaustive,  that is to say, the term defined will retain its  ordinary meaning but its scope would be extended to bring  within the term certain matters which in its ordinary  meaning may or may not comprise.  Applying the above test  to the term ’cooked food’ in Section 2(g) of the 1994 Act we  find that the said term uses the word ’includes’  in the  definition.  The said term ’cooked food’  makes the definition  enumerative when it includes within the said term sweets,  batasha, mishri, shrikhand, doodpat, tea and coffee.  When it  enumerates items like sweets, mishri, batasha, dhoodpak,  tea and coffee the enumerated items help us to probe into the  legislative intent. The legislative intent in the present case  under Section 2(g)  is to include consumables.  ’Fryums’ in  the present case at the relevant time were not directly  consumable.  They were under-cooked items.  They were  semi-cooked items.  They required  further process of frying  and addition of preservatives to make them consumables  even after the specified time.  But for the preservatives the  items would have become stale.

For the above reasons we set aside the impugned  judgment and allow this civil appeal filed by the Department  with no  order as to costs.