Rajasthan High Court - Jodhpur
Sugam Bio Foods Pvt Ltd vs State Of Raj. And Ors on 4 April, 2025
Author: Pushpendra Singh Bhati
Bench: Pushpendra Singh Bhati
[2025:RJ-JD:11082-DB] (1 of 11) [CW-2787/2010]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Civil Writ Petition No. 2787/2010
Sugam Bio Foods Private Limited, 1-kha-7, Hiran Magri Sector
No.11, Udaipur through its Director Naresh Trivedi s/o Shri K.L.
Trivedi, aged 38 years, r/o 51, Bhatiyani Chohatta, Behind
Mahalaxmi Temple, Udaipur.
----Petitioner
Versus
1. State of Rajasthan through the Commissioner, Commercial
Taxes, Government of Rajasthan, Kar Bhawan, Jaipur.
2. Additional Commissioner (Tax), Commercial Taxes, Kar
Bhawan, Rajasthan, Jaipur.
3. Commercial Taxes Officer, Anti-Evasion, Udaipur.
4. Commercial Taxes Officer, Circle-B, Udaipur.
----Respondent
Connected With
D.B. Civil Writ Petition No. 2788/2010
Sugam Bio Foods Private Limited, 1-kha-7, Hiran Magri Sector
No.11, Udaipur through its Director Naresh Trivedi s/o Shri K.L.
Trivedi, aged 38 years, r/o 51, Bhatiyani Chohatta, Behind
Mahalaxmi Temple, Udaipur.
----Petitioner
Versus
1. State of Rajasthan through the Commissioner, Commercial
Taxes, Government of Rajasthan, Kar Bhawan, Jaipur.
2. Additional Commissioner (Tax), Commercial Taxes, Kar
Bhawan, Rajasthan, Jaipur.
3. Commercial Taxes Officer, Anti-Evasion, Udaipur.
4. Commercial Taxes Officer, Circle-B, Udaipur.
----Respondent
For Petitioner(s) : Mr. Sharad Kothari
For Respondent(s) : Mr. Mahaveer Bishnoi, AAG
(Downloaded on 07/04/2025 at 09:47:12 PM)
[2025:RJ-JD:11082-DB] (2 of 11) [CW-2787/2010]
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
HON'BLE MR. JUSTICE CHANDRA PRAKASH SHRIMALI
Judgment
Reserved on 12/02/2025
Pronounced on 04/04/2025
Per Dr. Pushpendra Singh Bhati, J:
1. Since both the instant petitions involve an identical
controversy, they are being decided by this common judgment,
while taking the facts and submissions from the above-numbered
D.B. Civil Writ Petition No.2787/2010, treating the same as a lead
case.
2. The instant writ petitions have been preferred claiming the
following reliefs:
"It is, therefore, humbly prayed that the Writ Petition
may kindly be allowed and by an appropriate, order or
direction-
(i) impugned Circular dated 12/1/2010 (Annexure 7) issued
by the Additional Commissioner, Commercial Taxes may
kindly be quashed and set-aside.
(ii) impugned order dated 4/2/2010 (Annexure 9) reopening
the already completed assessment and raising huge demand
of tax, interest and penalty may be quashed and set-aside.
(iii) it may be declared that 'Frozen Peas' are fresh
vegetables and exempt under the Notification Dated
28/9/95.
(iv) Any other order or direction which this Hon'ble Court
deems just and proper may kindly be passed."
3. Brief facts of the case are that the petitioner is a Company
duly registered under the provisions of the Companies Act, 1956
[2025:RJ-JD:11082-DB] (3 of 11) [CW-2787/2010]
and is engaged in trading of Frozen Peas and other Frozen Food
Products. It is relevant to mention here that frozen peas are
those, which are prepared by boiling the peas at a particular
temperature and thereafter, freezing them, while not subjecting
them to any kind of cooking process, nor any kind of preservatives
are added.
4. The bone of contention in the present case is that the
petitioner was governed by the Notification dated 28.09.1995
whereby all fresh or dried vegetables were exempted from the tax
liability.
5. On 03.01.2006, while the petitioner in the Assessment Year
2003-04, effected the total sales of 37,75,364/- and claimed
exemptions in view of the Notification dated 28.09.1995, the
return filed by the petitioner was accepted and the petitioner's tax
liability was assessed as 'Nil'. However, the respondent No.4 issued
a notice dated 15.04.2009 calling upon the petitioner to appear on
14.05.2009 proposing to reopen the assessment for Assessment
Year 2003-04 under Section 30 of the Rajasthan Sales Tax Act,
1994 (hereinafter referred to as 'Act of 1994'), alleging that the
frozen peas are not fresh vegetables, and are thus, not exempted.
6. Learned counsel for the petitioner submitted that the
respondents themselves in a number of States have allowed the
frozen peas to be exempted under the category of fresh
vegetables and fruits and thus, the proceedings so initiated vide
notice dated 15.04.2009 are unlawful.
[2025:RJ-JD:11082-DB] (4 of 11) [CW-2787/2010]
6.1. Learned counsel further submitted that the respondents
despite such contest and defence have imposed huge demand of
tax which is to the tune of Rs.14,66,562/-. As per learned counsel,
the demand was apparently, in view of Circular dated 27.01.2010
issued by the Additional Commissioner (VAT & IT), whereby the
Deputy Commissioner (Administration) were directed to ensure
reopening of the assessment and levy tax.
6.2. Learned counsel also submitted that the impugned order
dated 04.02.2010 (Annexure-9) passed under Section 30 of the
Act of 1994 by the respondent No.2 was not in accordance with
law, as such proceedings could have been initiated only by the
Commissioner and not by the Deputy Commissioner
(Administration).
6.3. Learned counsel further submitted that the petitioner's
assessment for the Assessment Year 2003-04 has been made
under Section 29 of the Act of 1994 by the regular assessing
authority, vide order dated 03.01.2006, and that, such authority
had already assessed the entire return and was satisfied about the
nature of transaction and the taxability was thus marked as "Nil".
6.4. Learned counsel also submitted that there was an
explanation in Section 30 of the Act of 1994 which provides that
the assessment under this Section shall not include part of
business, which has already been assessed under Section 29 of
the Act of 1994, and the petitioner falls under such explanation,
as its case based on true & correct facts has been examined and
[2025:RJ-JD:11082-DB] (5 of 11) [CW-2787/2010]
his business has been assessed under Section 29 and its taxibility
has been declared as "Nil".
6.5. Learned counsel further submitted that the directives issued
by the Commissioner to all the Deputy Commissioners were in
violation of the law and thus, leviability of such tax could not have
been made.
6.6. Learned counsel also submitted that the frozen peas do not
require any preservatives or any sort of chemical, and the frozen
peas continue to be fresh peas or fresh vegetables. As per learned
counsel, the process undertaken by the manufacturer does not
alter the chemical or physical form, and properties of the peas and
the frozen peas continue to remain fresh vegetables and thus,
were to be exempted, unequivocally, from tax under the
Notification dated 28.09.1995.
6.7. Learned counsel further submitted that the respondents have
unlawfully held frozen peas as preserved vegetables, and taxed it
at the rate of 12% under the residuary entry, however, it was to
be exempted under the Notification dated 28.09.1995, being fresh
or dried vegetables.
7. On the other hand, Mr. Mahaveer Bishnoi, learned Additional
Advocate General appearing on behalf of the respondents, while
opposing the aforesaid submissions made on behalf of the
petitioner, submitted that the assessment order for the
Assessment Year 2003-04 for the petitioner was framed under
Section 29(4) of the Act of 1994 and the Self Assessment Scheme
vide order dated 03.01.2006.
[2025:RJ-JD:11082-DB] (6 of 11) [CW-2787/2010]
7.1. It was further submitted that the petitioner's taxability was
assessed as 'Nil' only on count of the fact that his annual returns
filed on 03.12.2004 under Form ST-5A, had shown the entire sale
of frozen food and the bio-food. As per learned Additional
Advocate General, it was only upon the enquiry conducted by the
Commercial Taxes Officer, Circle-B, Udaipur, it was found that
articles sold by the petitioner could not be said to be exempted
from payment of tax and hence, the notices under Section 30 of
the Act of 1994 were rightly issued on 27.01.2009 to the
petitioner by the respondents.
7.2. It was also submitted that the order of assessment dated
04.02.2010 for the year 2003-04 was passed after providing
sufficient opportunity of hearing to the petitioner, and it was found
by the respondent No.3 that the frozen peas sold by the petitioner
could not be said to be fresh vegetables, as the same fell under
the category of 'preserved vegetables' and therefore, were liable
to be taxed under the residuary entry attracting 12% rate of tax.
As per learned Additional Advocate General, a perusal of the
Notification dated 28.09.1995 issued under Section 15 of the Act
of 1994 shows that only fresh or dried vegetables, including onion
and garlic were exempted from payment of tax.
7.3. It was further submitted that the processing of the frozen
peas by subjecting it to a higher degree of temperature and then
to a lower degree of temperature amounts to their preservation
and thus, 'frozen peas' cannot be said to be fresh or dried
[2025:RJ-JD:11082-DB] (7 of 11) [CW-2787/2010]
vegetables so as to fall within the ambit of the Notification dated
28.09.1995.
7.4. It was also submitted that the petitioner had an alternate
remedy of appeal under Section 84 of the Rajasthan Value Added
Tax Act, 2003.
8. Heard learned counsel for the parties as well as perused the
record of the case.
9. This Court is of the firm opinion that Taxing Statutes need to
be interpreted in strict sense, and in this regard, it is considered
appropriate to reproduce the relevant portion of the judgment
rendered by the Hon'ble Supreme Court in the case of Chief
Commissioner of Central Goods and Service Tax & Ors. Vs.
M/s Safari Retreats Private Ltd. & Ors. (Civil Appeal No.
2948 of 2023, decided on 03.10.2024), as hereunder:
"25. Regarding the interpretation of taxation statutes, the
parties have relied on several decisions. The law laid down
on this aspect is fairly well-settled. The principles governing
the interpretation of the taxation statutes can be
summarised as follows:
a. A taxing statute must be read as it is with no additions
and no subtractions on the grounds of legislative
intendment or otherwise;
b. If the language of a taxing provision is plain, the
consequence of giving effect to it may lead to some absurd
result is not a factor to be considered when interpreting the
provisions. It is for the legislature to step in and remove
the absurdity;
c. While dealing with a taxing provision, the principle of
strict interpretation should be applied;
[2025:RJ-JD:11082-DB] (8 of 11) [CW-2787/2010]
d. If two interpretations of a statutory provision are
possible, the Court ordinarily would interpret the provision
in favour of a taxpayer and against the revenue;
e. In interpreting a taxing statute, equitable considerations
are entirely out of place;
f. A taxing provision cannot be interpreted on any
presumption or assumption;
g. A taxing statute has to be interpreted in the light of what
is clearly expressed. The Court cannot imply anything which
is not expressed. Moreover, the Court cannot import
provisions in the statute to supply any deficiency;
h. There is nothing unjust in the taxpayer escaping if the
letter of the law fails to catch him on account of the
legislature's failure to express itself clearly;
i. If literal interpretation is manifestly unjust, which
produces a result not intended by the legislature, only in
such a case can the Court modify the language;
j. Equity and taxation are strangers. But if construction
results in equity rather than injustice, such construction
should be preferred;
k. It is not a function of the Court in the fiscal arena to
compel the Parliament to go further and do more;
l. When a word used in a taxing statute is to be construed
and has not been specifically defined, it should not be
interpreted in accordance with its definition in another
statute that does not deal with a cognate subject. It should
be understood in its commercial sense. Unless defined in
the statute itself, the words and expressions in a taxing
statute have to be construed in the sense in which the
persons dealing with them understand, that is, as per the
trade understanding, commercial and technical practice and
usage."
10. On a bare reading of the Notification dated 28.09.1995 itself,
it is clear that the point which is to be determined by this Court in
the instant petitions, is whether the frozen peas could be termed
[2025:RJ-JD:11082-DB] (9 of 11) [CW-2787/2010]
as fresh or dried vegetables, so as to fall within the ambit of the
Notification dated 28.09.1995.
For ready reference, the Notification dated 28.09.1995
issued under Section 15 of the Act of 1994, reads as under:
"S.No.1027 : F.4(25)FDGr.IV/92-Pt.II-21 dated 28.09.1998, pub.
28.09.1995
S.O.125- In exercise of the powers conferred by S.15, RST Act,
1994, the State Govt. (.1.), hereby exempts from tax under the
said At, the sale or purchase of the following goods on the
conditions and exceptions as mentioned against them, namely;
Item No. Description of the goods and conditions and exceptions
subject to which exemption is allowed
1. (a) Fresh fruits (excluding watery coconuts); (b) Fresh or dried
vegetables (including onion and garlic); (c) Vegetable seeds
(excluding Matira seeds and Tumba seeds); (d) Fresh flowers and
flower seeds; (e) Bulbs; and (f) Plants excluding orchids.
Except when any of these articles (excluding vegetable seeds) is
sold in sealed containers.
Explanation.- The tax, if any charged or collected on the sale of
vegetables seeds shall be paid to the Govt. and the tax paid to the
Govt., if any, shall not be refunded.
2. Dhai, Khoa and cream.
3. Meat and eggs, in their raw or fresh form.
4. Salt.
5. Handspun and handwoven khadi and yarn produced by the All
India Khadi and Village Industries Commission or by any other
organisation of person certified by it and sold exclusively by one
class of dealers.
6. Handlooms.
7. Fertilisers and manures (not including fertilisers).
8. Cattle feeds excluding gowar, cottonseed [oil-cake and deoiled
cake].
[2025:RJ-JD:11082-DB] (10 of 11) [CW-2787/2010]
9. Books, slates, slate pencils and periodical journals.
10. Firewood.
11. Water excluding (a) water sold in sealed bottles or containers;
(b) distilled water; (c) mineral water; and (d) aerated waters.
12. Handloom cloth excluding pure silk handloom cloth.
13. Electrical energy.
This shall have effect from 1st day of October, 1995."
11. This Court is of the opinion that aforesaid Notification itself is
clear that the exemption will go only to fresh or dried vegetables,
and that, as the frozen peas in question are neither fresh nor dried
vegetables, and rather have been subjected to extreme
temperatures to be treated for consumption at a future date, and
packed in polythene bags to make them last long.
12. This Court further observes that the petitioner assessee has
nowhere in the self made assessment or declaration declared itself
to be engaged in the business of 'frozen peas' but has rather used
the terms 'peas' (green peas) thereby intending itself to be
covered under the head of "fresh/dried vegetables" of the
aforesaid notification. This conduct of the petitioner shows that
the petitioner tried to escape the assessment by claiming itself to
be governed by the aforesaid notification under the garb of
treating and declaring 'frozen peas' as a bio-food i.e. peas to come
under the said exclusion.
13. This Court observes that the reading of the aforementioned
Notification 28.09.1995 issued under Section 15 of the Act of 1994
clearly shows that the legislative mandate was for fresh fruits/
fresh vegetables/fresh seeds/fresh flowers/Bulbs/Plants excluding
[2025:RJ-JD:11082-DB] (11 of 11) [CW-2787/2010]
Orchids and this is a category which is different from packed and
frozen peas, which is a conscious exclusion, and cannot be
included by a judicial interpretation.
14. In view of the above, this Court does not find it a fit case so
as to grant any relief to the petitioner in the instant petitions.
15. Consequently, the present petitions are dismissed. All
pending applications stand disposed of.
(CHANDRA PRAKASH SHRIMALI),J (DR.PUSHPENDRA SINGH BHATI),J
SKant/-
Powered by TCPDF (www.tcpdf.org)
