Allahabad High Court
M/S Bikanerwala Foods(P) Ltd. vs Commissioner Trade Tax on 7 July, 2011
Bench: Rajes Kumar
HIGH COURT OF JUDICATURE AT ALLAHABAD
Reserved
Trade Tax Revision No.340 of 2010
M/s. Bikanerwala Foods (P) Limited ....................................Applicant
Vs.
The Commissioner Trade Tax,
U.P., Lucknow............................................................Opposite Party
Alongwith
Trade Tax Revision No.341 of 2010
M/s. Bikanerwala Foods (P) Limited ....................................Applicant
Vs.
The Commissioner Trade Tax,
U.P., Lucknow...........................................................Opposite Party
_______
Hon'ble Rajes Kumar, J.
These are two revisions arising from the order of the Tribunal relating to the assessment years 2002-03 and 2003-04, under the U.P. Trade Tax Act (hereinafter referred to as the Act).
The short question involved in these revisions relates to the taxability of the product manufactured by the applicant, which according to the applicant is 'Sattu'. According to the applicant, the product manufactured by it consists of wheat, rice, soyabean, salt, sugar and vitamin, is a balanced food supplied to the Government.
According to the counsel for the applicant, the product consists of 45% wheat, 12.5% rice, 22.5% soyabean, 20% sugar and other items. The product is manufactured by grinding of the aforesaid items and is in a powdered form like flour. The applicant treats such product as 'Sattu' and claims exemption under the Notification No. KA.NI-2-699/XI-9(175)/91, dated 5th February, 2003, issued by the State Government in exercise of power under Section 4 (a) of the U.P. Trade Tax Act, exempting 'Sattu'.
The assessing authority has rejected the claim of exemption. According to the assessing authority, the product manufactured by the applicant is not 'Sattu'. According to the assessing authority, soyabean is an oil seed and is covered under the definition of 'oil seed', defined under Section 14 of the Central Sales Tax Act. In the assessment order for the assessment year 2002-03, the assessing authority has observed that the applicant-assessee has admitted the liability of tax on the sale of manufactured nutritive product. However, in the assessment year 2003-04, the applicant has claimed the exemption on such manufactured balanced food treating it as 'Sattu', under the aforesaid notification. The assessing authority denied the exemption on the ground that in common parlance, flour of grinded gram and barley (Jao) are known as 'Sattu' and not the product manufactured by the applicant.
The applicant filed two appeals before the Joint Commissioner (Appeals), NOIDA. The Joint Commissioner (Appeals) rejected both the appeals. Being aggrieved by the order of the Joint Commissioner (Appeals), the applicant filed two appeals before the Tribunal. The Tribunal by the impugned orders rejected both the appeals. The Tribunal in its orders has held that as per entry of the Notification no. KA.NI-2-699/XI-9(175)/91, dated 5th February, 2003, the product manufactured by the process of grinding of two or more than two items, namely, roasted barley, gram, wheat, Makka, Matar and other foodgrains is called 'Sattu'. However, the product manufactured by the applicant contains soyabean, rice, sugar and salt and, therefore, the balanced food manufactured by the applicant does not fall within the purview of 'Sattu'. It is further observed that soyabean is treated as an oil seed as defined under Section 14 of the Central Sales Tax Act and it contains substantial protin, which is being used to produce the balanced food.
Heard Sri Bharat Ji Agarwal, learned Senior Advocate, appearing on behalf of the applicant and Sri V.K. Pandey, learned Standing Counsel.
The short question involved in the present revisions is whether the balanced food manufactured by the applicant is 'Sattu' and is exempted from tax under the Notification no. KA.NI-2-699/XI-9(175)/91, dated 5th February, 2003. It is useful to refer the Hindi and English versions of the notification dated 5th February, 2003, which are quoted below:-
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English Translation of Government Notification No. KA.NI-2-699/XI-9(175)/91, dated 5th February, 2003.
In exercise of the powers under Clause(a) of Section 4 of the Uttar Pradesh Trade Tax Act, 1948 (U.P. Act No. XV of 1948), the Governor is pleased to direct that with effect from 5th February, 2003, no tax under the said Act shall be payable on the sale of the following goods :
Sl. No. Description of goods
1. ...............................
2. Sattu (which means grinding mixture of two or more than two commodities of roasted barley, gram, wheat, maize, peas and any other foodgrain.
3. ......................
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There is no dispute that the balanced food manufactured by the applicant consists of 45% wheat, 12.5% rice, 22.5% soyabean, 20% sugar and other vitamins and minerals. It does not contain barley, gram, maize and peas.
Learned counsel for the applicant submitted that soyabean is held as a pulse by the Apex Court in the case of Commissioner of Sales Tax, Madhya Pradesh vs. General Foods (P) Limited, reported in (1999) Vol. 113 STC, 315. The soyabean is used as a food. Foodgrain is a comprehensive term, which includes all grains, which are used as food. The Division Bench of this Court in the case of Bakhat Ram Takhat Ram vs. State of U.P., reported in 1973 UPTC 242 observed that "foodgrain is a comprehensive term, which includes all grains which are used as food by human being", hence unless any specific item is excluded from the notification, all foodgrains shall be covered by the notification itself. He also referred the Dictionary meaning and ISI specification issued by the Bureau of Indian Standards to establish that soyabean is also a foodgrain. He submitted that under the notification, the grinding mixture of two more more than two commodities, namely, roasted barley, gram wheat maize, peas and any other foodgrain is covered under 'Sattu'. The balanced food manufactured by the applicant consists of wheat, rice and soyabean. The wheat and rice are foodgrains, therefore, even if soyabean may not be considered as a foodgrain, but since these two items, namely, wheat and rice are available in the product, it is sufficient for the purposes of the entry and manufactured product falls within the meaning of 'Sattu'.
Learned Standing Counsel submitted that under Section 14 of the Central Sales Tax Act, soyabean is treated as an oil seed. Under the U.P. Trade Tax Act, the oil seed, as defined under Section 14 of the Central Sales Tax Act, is made liable to tax at the rate of 4%. Therefore, for the purposes of the Act, soyabean is to be considered as an oil seed and not as a foodgrain. It may be used as a foodgrain, but since under the Act it has been treated as an oil seed and not as a foodgrain, therefore for the purposes of the present notification, it cannot be treated as a foodgrain. Therefore, the decisions of the Apex Court and this Court as well as the Dictionary meaning cited by the learned counsel for the applicant are wholly irrelevant. He submitted that the primary contents in 'Sattu' is the barley and gram. Without barley and the gram, any product cannot be treated as 'Sattu' in commercial sense and in common parlance. It is being used in the villages by the villagers as a food. Admittedly, the gram and barley are not components in the product manufactured by the applicant. He submitted that the Hindi version of the notification clarifies the English version of the notification. The Hindi version of the notification clearly states that 'Sattu' means grinded barley, gram, wheat, makka, matar and any other two or more than two foodgrains. The word "two or more than two" refers to "any other foodgrains", but the presence of roasted barley, gram, wheat, makka and matar are necessary constituents of 'Sattu'. Admittedly, the balanced food manufactured and sold by the applicant does not consists of roasted barley, gram, wheat, makka and matar and, therefore, it cannot be treated as 'Sattu'. The assessing authority has recorded categorical finding that in commercial sense flour of roasted barley and gram is known as 'Sattu', and the learned counsel for the applicant is not able to produce any material to show that in common parlance and in commercial sense or otherwise in the absence of roasted barley and gram any flour can be known as 'Sattu'.
I have heard learned counsel for the parties and perused the impugned orders.
Admittedly, the balanced food manufactured and sold by the applicant only consists of wheat, rice, soyabean, sugar and other vitamins. It does not consists of roasted barley, gram, makka and matar. Soyabean is included under the definition of "oil seed", defined under Section 14 of the U.P. Sales Tax Act. Oil seed, as defined under Section 14 of the Central Sales Tax Act, is taxable under the U.P. Trade Tax Act. Soyabean is included within the definition of cereals as defined under Section 14 of the Central Sales Tax Act and, therefore, under the U.P. Trade Tax Act, soyabean is liable to tax as an oil seed and not as a foodgrain or cereal. Soyabean may be used as a foodgrain and to be treated as a foodgrain, but in view of the above, is to be treated as an oil seed and not as a foodgrain for the purposes of the Act and the notification under consideration. However, it is not much relevant whether soyabean is a foodgrain or not in view of the reasons given below.
The assessing authority has held that in common parlance, 'Sattu' is a flour of roasted barley and gram. The Hindi version of the notification clarifies the English version of the notification. The plain reading of the Hindi version of the notification shows that the word 'two or more than two commodities' refers to "any other foodgrain" only, but the presence of roasted barley, gram, wheat, makka and matar are necessary constituents of 'Sattu'. 'Sattu' is a kind of flour which is being mainly used in the villages by the villagers as food. It is little cheaper than the normal wheat flour because of the presence of Barley and gram etc. One cannot imagine and accept a flour as 'Sattu' in the absence of Barley (Jao) and gram.
In view of the above, I am of the view that the balanced food manufactured by the applicant which consists of wheat, rice, soyabean, sugar and vitamins etc. cannot be treated as 'Sattu' under the Notification no. KA.NI-2-699/XI-9(175)/91, dated 5th February, 2003. In the result, both the revisions fail and are dismissed.
7.7.2011
bgs/-
