Delhi High Court
Gian Chand Halwai vs Commissioner Of Sales Tax on 18 February, 1991
Bench: B Kirpal, S Duggal
JUDGMENT
1. The Sales Tax Appellate Tribunal has referred the following two questions for our opinion :
"1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the 'burfee' as sold by the dealer was not 'milk product' as specified under entry 12 of the Second Schedule of the Bengal Finance (Sales Tax) Act, 1941, as then extended to the Union Territory of Delhi and its sale was not exempted from payment of sales tax ?
2. Whether, on the facts and in the circumstances, the Appellate Tribunal was justified in holding that 'muthri' prepared and sold by the dealer was not 'bread' under entry 3 of the Second Schedule to the Bengal Finance (Sales Tax) Act, 1941, as then extended to the Union Territory of Delhi and was not exempt from payment of sales tax ?"
2. According to the statement of the case, the appellant carries on the business of halwai and deals in sweetmeats including burfee and namkeen including muthri, etc.
3. The dealer claimed that burfee was a milk product and was exempt under entry 12 of the Second Schedule appended to the Bengal Finance (Sales Tax) Act, 1941, as then extended to the Union Territory of Delhi and muthri being bread was also exempt from payment of sales tax under entry 3 of the Second Schedule to the said Act.
4. The Sales Tax Officer did not accept this contention. An appeal was filed and reliance was placed on a decision of this Court in the case of Kwality Ice Cream Company and Restaurant v. Sales Tax Officer [1974] 34 STC 396. It was contended that just as ice cream has been held to be a milk product, similarly burfee should also be regarded as milk product. The Assistant Commissioner, however, held that the process or manufacture of ice cream and burfee was different, and therefore the said decision was not applicable.
5. Further appeal was filed to the Tribunal. The Tribunal noted that the ingredients of burfee were not disclosed and as such the same could not be regarded as a milk product. The Tribunal also rejected the claim for exemption in respect of "muthri".
6. On an application for reference having been filed, the Tribunal referred the aforesaid two questions to this Court.
7. As regards question No. 1 is concerned we feel bound by the decision of this Court in Kwality Ice Cream Company's case [1974] 34 STC 396. It was held by the Division Bench of this Court that the entries in the statutes have to be interpreted in the manner they are understood in common parlance or in commercial circles. The court in that case referred to a number of decisions which dealt with the question as to whether lassi and condensed milk, etc., could be regarded as milk product or not. This Court further referred to the provisions of the Prevention of Food Adulteration Rules, 1955, where the milk product had been defined. It was then held that even though ice cream is a different commodity made from fresh milk or milk but it was certainly a milk product.
8. Before us it is contended by Mr. Ahuja that the dealer is concerned with only burfee known as khoya burfee. According to the learned counsel the principal ingredient of the burfee is milk. Milk is boiled and after it gets concentrated, it is allowed to set and then it is cut into pieces. This burfee is product of milk. Merely because of a few nuts may have been added or silver leaf put on top of it, the nature of the burfee would not change and it will still remain a milk product.
9. The learned counsel for the respondent, however, submits that the burfee is a milk preparation but certainly not a milk product.
10. As already noted in Kwality Ice Cream Company's case [1974] 34 STC 396 this Court has held that the entry dealing with milk product should be regarded as including ice cream. If ice cream is regarded as a milk product, then we fail to understand as to how burfee made from khoya cannot be so regarded as a milk product. Of course, there are various types of burfees which are available in the market such as almond burfee, chocolate burfee, pista burfee, etc., but we are not concerned with those types in the present case. Mr. Ahuja has stated that the burfee we are concerned within the present case is plain burfee made from khoya. In our opinion such burfee has to be regarded as a milk product in view of the ratio of the decision of this Court in Kwality Ice Cream Company's case [1974] 34 STC 396.
11. Before concluding we may observe that the scheme has undergone a change with the enactment of the Delhi Sales Tax Act, 1975. The entries in the various Schedules are now more specific and defined and the entry of milk product does not find any mention in the Third Schedule of 1975 Act. It is evident, therefore, that the question whether burfee is a milk product or not would have relevance only to cases prior to the applicability of the 1975 Act.
12. As regards question No. 2 is concerned, we fail to understand how, by any stretch of imagination, muthri can be regarded as bread. It is well-settled principle of interpretation of different entries in the Sales Tax Act that each entry has to be understood by different means in common parlance or in commercial circles. Bread is always made with the help of yeast where the other ingredient is maida or flour of wheat. Further every bread is baked while muthri on the other hand, even though made of maida, is always fried. In common parlance under no stretch of imagination can muthri ever be regarded as bread. The bread is available from baker's shop while muthri is not. It is the halwai who prepares and sells muthri and not the baker. In our opinion, therefore, muthri cannot be regarded as a bread.
13. For the aforesaid reasons, question No. 1 is answered in favor of the dealer while question No. 2 is answered in favor of the department.
14. The petition stands disposed of accordingly. There will be no order as to costs.
15. Reference answered accordingly.
