COMMNR. OF COMMERCIAL TAX,INDORE vs. T.T.K. HEALTH CARE LTD

C.A. No.-000309-000309 - 2002Supreme Court11 April 20073 pages
For Petitioner: C. D. SINGHFor Respondent: NIKHIL NAYYAR
AI SummaryAllowed

What did the Supreme Court hold?

The Supreme Court held that 'fryums' do not fall within the definition of 'cooked food' under Item 2, Part I of Schedule II of the M.P. Commercial Tax Act, 1994. The Court noted that the definition of 'cooked food' in Section 2(g) is inclusive and enumerates items like sweets, batasha, mishri, shrikhand, doodhpak, prepared tea, and coffee, while excluding items like ice-cream, cakes, and biscuits. The Court reasoned that the legislative intent behind the inclusive definition was to cover direct consumables. 'Fryums', at the relevant time, were semi-cooked or under-cooked items that required a further cooking process (frying in edible oil) to become consumable. They were not directly consumable and needed preservatives to prevent spoilage. Therefore, 'fryums' were held to fall under the residuary entry 'all other goods not included in any part of Schedule I' of Part VII of Schedule II, taxable at 8%. The impugned judgment of the High Court was set aside.

What were the facts?

The assessee, T.T.K. Health Care Ltd., is a registered dealer under the M.P. Commercial Tax Act, 1994. The dispute concerns the classification of 'fryums' for sales tax purposes for Assessment Years 1992-93 and 1993-94. The assessee contended that 'fryums' fall under Item No. 2 of Part I of Schedule II, classified as 'cooked food', attracting a 4% tax rate. The Department argued that 'fryums' fall under the residuary entry in Part VII of Schedule II, attracting an 8% tax rate. The Assistant Commissioner assessed 'fryums' at 8% tax, demanding Rs. 1.33 lakhs for the first year and Rs. 66,202 for the second. Appeals and revisions by the assessee were dismissed. The Madhya Pradesh High Court, in a writ petition, held 'fryums' to be 'cooked food', a decision confirmed by a Division Bench.

What were the issues?

1. Whether 'fryums' are classifiable as 'cooked food' under Item 2 of Part I of Schedule II to the M.P. Commercial Tax Act, 1994, attracting a 4% tax rate, or as 'all other goods' under the residuary entry in Part VII of Schedule II, attracting an 8% tax rate, turning on the interpretation of Section 2(g) of the Act. Assessee's Contention: 'Fryums' are 'cooked food' and should be taxed at 4% as per Item 2, Part I, Schedule II of the M.P. Commercial Tax Act, 1994, corresponding to Entry IV of Part I of Schedule II of the M.P. General Sales Tax Act, 1958. Revenue's Contention: 'Fryums' are not 'cooked food', nor 'namkeen', 'papad', or 'cereals'. They fall under the residuary entry of Part VII of Schedule II, taxable at 8% (earlier 6%). The Commissioner of Commercial Tax held this view. The Department relied on the Assistant Commissioner's assessment and the subsequent dismissal of appeals and revisions.

Which sections of the Income-tax Act were involved?

Section 2(g),Section 10(1),Section 68

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3 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 thereaf

The order continues below.

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