Telangana High Court
The Sales Tax Appellate Tribunal vs M/S.Hyderabad Race Club on 13 November, 2025
Author: P.Sam Koshy
Bench: P.Sam Koshy
IN THE HIGH COURT FOR THE STATE OF TELANGANA :: HYDERABAD
***
TAX REVISION CASE No.60 of 2010
TAX REVISION CASE No.72 of 2010
TAX REVISION CASE No.105 of 2010
TAX REVISION CASE No.106 of 2010
TAX REVISION CASE No.116 of 2010
AND
TAX REVISION CASE No.139 of 2010
Between:
The State of Andhra Pradesh,
Rep. by the State Representative before STAT,
D.No.5-4-404 to 408,
Nampally, Andhra Pradesh, Hyderabad.
Petitioner
VERSUS
M/s. Hyderabad Race Club,
Malakpet, Hyderabad.
Respondent
COMMON ORDER PRONOUNCED ON: 13.11.2025
THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE NARSING RAO NANDIKONDA
1. Whether Reporters of Local newspapers
may be allowed to see the Judgments? : Yes
2. Whether the copies of judgment may be
marked to Law Reporters/Journals? : Yes
3. Whether His Lordship wishes to
see the fair copy of the Judgment? : Yes
_______________
P.SAM KOSHY, J
Page 2 of 42
* THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE NARSING RAO NANDIKONDA
+TAX REVISION CASE No.60 of 2010
TAX REVISION CASE No.72 of 2010
TAX REVISION CASE No.105 of 2010
TAX REVISION CASE No.106 of 2010
TAX REVISION CASE No.116 of 2010
AND
TAX REVISION CASE No.139 of 2010
% 13.11.2025
# Between:
The State of Andhra Pradesh,
Rep. by the State Representative before STAT,
D.No.5-4-404 to 408,
Nampally, Andhra Pradesh, Hyderabad.
Petitioner
VERSUS
M/s. Hyderabad Race Club,
Malakpet, Hyderabad.
Respondent
! Counsel for petitioner : Mr. Swaroop Oorilla, learned Special Standing
Counsel for Commercial Tax.
^Counsel for respondent : Mr. S.Ravi, learned Senior Counsel appearing
on behalf of Mr. CH. Pushyam Kiran.
<GIST:
> HEAD NOTE:
? Cases referred
1) 37 STC 522
2) 1987 SCC OnLine AP 87
3) (1999) 3 SCC 346
4) (2023) 6 SCC 451
5) 1993 SCC OnLine SC 10
6) 2000 SCC Online AP 557
7) 1978 SCC OnLine Guj 102
8) 1987 SCC OnLine AP 558
Page 3 of 42
THE HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA
TAX REVISION CASE No.60 of 2010
TAX REVISION CASE No.72 of 2010
TAX REVISION CASE No.105 of 2010
TAX REVISION CASE No.106 of 2010
TAX REVISION CASE No.116 of 2010
AND
TAX REVISION CASE No.139 of 2010
COMMON ORDER:
(per the Hon'ble Sri Justice P.Sam Koshy)
Heard Mr. Swaroop Oorilla, learned Special Standing Counsel for
Commercial Tax appearing on behalf of the petitioner - State; and
Mr. S.Ravi, learned Senior Counsel appearing on behalf of Mr. CH.Pushyam
Kiran, learned counsel for the respondent.
2. These are six Tax Revision Cases filed by the State under Section
22(1) read with Rule 10 of the Andhra Pradesh Goods and Service Tax Rules
(hereinafter referred to as 'APGST Rules') under the Andhra Pradesh Goods
and Service Tax Act, 1957 (hereinafter referred to as 'APGST Act')
challenging the orders passed by the Sales Tax Appellate Tribunal, Andhra
Pradesh, Hyderabad (hereinafter referred to as the 'STAT'). The details of
each of the case; like the Tax Revision Case number, assessment year, and
the Tax Appeal number before the STAT along with date on which it was
decided is reproduced below:
Sl. TREVC. No. ASSESSMENT IMPUGNED ORDER
No. YEAR
1. 60 of 2010 1995-1996 T.A.No.393 of 2001, decided on 01.10.2008
2. 72 of 2010 1999-2000 T.A.No.1093 of 2001, decided on 01.10.2008
3. 105 of 2010 1994-1995 T.A.No.392 of 2001, decided on 01.10.2008
4. 106 of 2010 1998-1999 T.A.No.396 of 2001. decided on 01.10.2008
5. 116 of 2010 1993-1994 T.A.No.391 of 2001, decided on 01.10.2008
6. 139 of 2010 1996-1997 T.A.No.394 of 2001, decided on 01.10.2008
3. In all these since cases the point of contention is same, they have
been taken up and heard together and are decided by this Common Order.
4. For convenience, the facts in Tax Revision Case No.105 of 2010 are
discussed hereunder.
5. The facts of the case are that the respondent M/s. Hyderabad Race
Club is an organization engaged in horse racing activities. During the
assessment years in question, the Commercial Tax Officer examined various
transactions undertaken by the club and determined that it qualified as a
"dealer" under Section 2(e) of the APGST Act. The assessing authority found
that the club was involved in multiple commercial activities including the sale
of food items to outsiders (Rs.1,90,975/-), sale of oats to horse trainers
(purchase value Rs.52,30,405/-), sale of gunnies (Rs.51,473/-), sale of
tender forms (Rs.4,930/-), and sale of scrap materials (Rs.1,29,100/-).
Additionally, tax was levied under Section 6A of the APGST Act amounting to
Rs.2,66,302/- on works contract turnover. The respondent challenged the
tax assessment arguing that as a club it should not be treated as a dealer
and that several of these transactions should either be exempted or taxed at
different rates.
6. According to the respondent, the classification and taxation of oats
formed the largest component of the contested turnover. The assessing
authority had classified oats as "General Goods" under the seventh schedule
and levied tax on the purchase value of Rs.52,30,405/-. The respondent
stated that oats should be classified as "cattle feed" under Entry 80 of the
First Schedule of the APGST Act, which would attract a lower tax rate of 4%
(w.e.f. 01.04.1995) or 1% (up to 01.04.1995). The respondent submitted
that the oats purchased were wild oats and not fit for human consumption
and were exclusively used for feeding horses. Furthermore, the respondent
maintained that even if taxable, the levy should be on the sale value of
Rs.10,66,914/- (at which the oats were sold at subsidized rates to trainers)
rather than on the purchase value, as Entry 80 stipulated taxation at the
first point of sale.
7. The petitioner filed these Tax Revision Cases stating that the STAT has
erred in its findings on two grounds:
a) Firstly, holding that the sale of tender forms is not exigible to tax,
when such activity constitutes a business transaction that attracts tax
liability under the APGST Act.
b) Secondly, treating oats as cattle feed under Entry 80 of the First
Schedule at concessional rates, when it should be taxed as general
goods at applicable rates.
8. Further the petitioner stated that the Hyderabad Race Club's activities
including the sale of tender forms, supply of oats to horse trainers, and
other commercial transactions cannot be regarded as incidental or ancillary
to its main charitable objectives, and therefore the Club qualifies as a dealer
whose transactions are liable to tax. Thus, the petitioner seeks to set aside
the STAT's order dated 01.10.2008, and restore the tax liability on these
transactions as originally assessed by the Commercial Tax authorities.
9. Learned Special Standing Counsel for Commercial Tax contended that
the respondent qualifies as a "dealer" within the meaning of Section 2(e) of
the APGST Act. He argued that the definition of "dealer" specifically includes
clubs that carry on business activities, and the club's operations clearly
demonstrated commercial activities. He also pointed to the club's sale of
food items to outsiders (Rs.1,90,975/-), supply of oats to horse trainers,
sale of gunnies, tender forms, and scrap materials as evidence of business
transactions. Further, he emphasized that the respondent was receiving
income through sale of various items including drinks and food, and was
engaged in purchase and resale activities, particularly with respect to oats
purchased from outside the State and sold at subsidized rates to trainers.
According to him, these activities constitute "carrying on business" and
therefore bring the club within the ambit of the dealer definition, making all
such turnovers exigible to tax under the APGST Act.
10. Further, the learned Special Standing Counsel argued on the
classification of oats where he had rejected the contentions of the
respondent that oats should be classified as cereals under Entry 20 of the
Third Schedule or as cattle feed under Entry 80 of the First Schedule.
However, he submitted that oats should be treated as "General Goods"
falling under the Seventh Schedule as unclassified goods, thereby attracting
tax at a higher rate. Thereafter, he argued that the tax should be levied on
the purchase value of Rs.52,30,405/- as assessed by the Commercial Tax
Officer. Moreover, petitioner's position was that the classification as general
goods was appropriate to the given nature of the transactions and the
manner in which the club was conducting its business operations. The
learned Special Standing Counsel contended that the assessing authority had
correctly applied the applicable tax rates after proper examination of the
nature of goods and transactions involved.
11. Lastly, on the other disputed items, the learned Special Standing
Counsel contended that with regard to the overall turnover under Section 6A
of the APGST Act (Rs.2,66,302/-) and sale of gunnies (Rs.51,473/-), the
respondent failed to produce documentary evidence showing purchases from
registered dealers, which would have entitled them to exemptions or
concessional treatment. Further, he argued that in the absence of such
evidence, the assessing authority was justified in levying tax on these overall
turnovers and in allowing only discount of 20% on the overall turnover under
Section 6A. For the sale of food items (Rs.1,90,975/-), the respondent had
been established as a dealer. Thus, the amount received from the sale of
food items to outsiders was clearly exigible to tax under Section 5C of the
APGST Act. Moreover, he supported the view that the burden of proof lies
with the respondent to establish entitlement to any exemptions or
concessional rates, and in the absence of adequate documentation, the
original assessment orders were correctly passed and should be upheld by
the STAT.
12. Per contra, the learned Senior Counsel appearing for the respondent
contended that it should not be classified as a "dealer" within the meaning of
Section 2(e) of the APGST Act. The learned Senior Counsel argued that while
the definition of "dealer" includes clubs, there is a crucial rider that the club
must be "carrying on business." He submitted that as a club primarily is
engaged in horse racing activities, its core function was not commercial in
nature. The club's activities, including the sale of food and drinks in the
canteen to both members and outsiders, supply of oats to trainers, sale of
tender forms to participants, sale of gunnies, and disposal of scrap materials
were to be merely incidental or ancillary to its main non-commercial
objective of horse racing rather than constituting independent business
activities.
13. The learned Senior Counsel further emphasized that any sales or
supplies made were subsidiary to its primary non-commercial objectives and
therefore should not bring the club within the ambit of the dealer definition
under the APGST Act, and consequently, these transactions should not
attract liability to tax under the provisions of the APGST Act.
14. The learned Senior Counsel further emphasizing on the classification of
oats, challenged the assessing authority's classification of oats as "General
Goods" under the Seventh Schedule which resulted in taxation at 6%, half
percent, and 10% surcharge. He argued that oats should be classified either
as cereals under Entry 20 of the Third Schedule or, more appropriately, as
cattle feed under Entry 80 of the First Schedule. However, he acknowledged
that the expression 'that is to say' in Entry 20 of the Third Schedule is
exhaustive, limiting cereals to only three specified varieties i.e. Bazra, Kodon
and Kutki and therefore, oats would not fall under this entry.
15. The learned Senior Counsel for the respondent also relied upon a
judgment of the Supreme Court in the case of M/s. Shah Wallace &
Company Limited vs. State of Tamil Nadu 1, which held that such
exhaustive expressions 'that is to say' should be given effect only to the
descriptions specified. Consequently, the oats squarely fall under Entry 80 of
the First Schedule as 'cattle feed' since it is exclusively used for feeding
horses and are not fit for human consumption.
16. The learned Senior Counsel for the respondent submitted substantial
evidence to support the classification of oats as cattle feed, including
dictionary definitions and expert literature. According to the dictionary
meaning presented, 'cattle' is defined as beasts of pasture, especially oxen,
bulls and cows and also horses, sheep etc. This broad definition includes
horses within the scope of cattle. He further cited a book about "Care &
37 STC 522
Management of Stabled Horses" which states that "Ponies and Horses in
regular hard work need additional food to keep in a fit, hard-muscled
condition. In other words, they need energy rather than fatness. This is
provided by the feeding of concentrated food-stuffs, usually known as 'short'
or 'hard' feeds, of this the best is oats, which can be bruised, crushed or
rolled to aid digestion".
17. According to the learned Senior Counsel, oats have always been
considered the ideal cereal for feeding horses. The fibrous husk, covering the
rich seed encourages chewing and helps prevent the horse from eating too
quickly, which can seriously disrupt its digestive system. Furthermore, he
argued that the wild oats purchased were exclusively fed to horses and were
not suitable for human consumption. The horses in question are specifically
breed and are maintained for the purpose of taking part in horse races
conducted by the Race Club and consequently, the oats used to feed these
horses to be classified as 'cattle feed' within the meaning of item 80 of the
First Schedule. Thus, the oats purchased and sold by the respondent are
properly classified under Entry 80 of the First Schedule as cattle feed and
shall be taxed at the rate prescribed there under.
18. Lastly, the learned Senior Counsel on the quantum of tax liability for
oats contended that even if the oats were held to be taxable as cattle feed
under Entry 80 of the First Schedule, tax should be levied on the sale value
rather than the purchase value. Further, he pointed out that Entry 80
provides for taxation at the first point of sale, and the club sold the oats at
subsidized rates to trainers for Rs.10,66,914/-, whereas the purchase value
was Rs.52,30,405/-. Therefore, the taxable turnover should be limited to
Rs.10,66,914/- and should be taxed at the rate applicable for cattle feed
under Entry 80 (4% w.e.f. 01.04.1995 or 1% up to 01.04.1995) rather than
the higher rates applied by the assessing authority on the purchase value.
19. Having heard the contentions put forth on either side and on perusal of
records, it would be relevant to take note of a few decisions of the Supreme
Court as well as of the different High Courts on the subject matter.
20. The Supreme Court in the case of Venkataramana Hatcheries Pvt.
Ltd. vs. Commercial Tax Officer 2 has held as under:
"The use of the word "includes" in the definition of the expression
"goods" in clause (12) of article 366 gives a clear indication that the
definition is not intended to be exhaustive. Long before the
Constitution of India was enacted, there were several sales tax laws in
the country where "goods" was defined to mean all kinds of movable
property. Parliament was well aware of the several sales tax laws in
existence at the time the Constitution of India was drafted and
adopted and it did not intend to restrict the meaning of the word
1987 SCC OnLine AP 87
"goods" by using the expression "means" in the definition clause.
Instead, it used the term "includes". Had the Parliament intended to
restrict the meaning of the word "goods" only to inanimate objects or
things, nothing could have precluded it from stating so. Instead of
doing that, the Parliament used the word "includes" in the definition
clause thereby expressing its intention that the definition was not
intended to be exhaustive.
In construing a word used in a legislative entry we have to remember
that the word should be given the widest meaning so as to
comprehend all ancillary or subsidiary matters as Gwyer, C.J., had
observed in United Provinces v. Mst. Atiqa Begum AIR 1941 FC 16 at
page 25:
"None of the items in the Lists is to be read in a narrow or
restricted sense, and that each general word should be held
to extend to all ancillary or subsidiary matters which can
fairly and reasonably be said to be comprehended in it. I
deprecate any attempt to enumerate in advance all the
matters which are to be included under any of the more
general descriptions; it will be sufficient and much wiser to
determine each case as and when it comes before this
court.""
21. Similarly, in CIT vs. Kasturi & Sons Ltd. 3, the Supreme Court in
paragraph No.9 of its judgment reinforced the principle of strict construction
of taxing statutes. Paragraph No.9 for ready reference is reproduced below:
(1999) 3 SCC 346
"9. The principle that a taxing statute should be strictly construed is
well settled. In Principles of Statutory Interpretation by Justice G.P.
Singh, 6th Edn., 1996, the law is stated thus:
"The well-established rule in the familiar words of LORD
WENSLEYDALE, reaffirmed by LORD HALSBURY and LORD
SIMONDS, means: 'The subject is not to be taxed without
clear words for that purpose; and also that every Act of
Parliament must be read according to the natural
construction of its words.' In a classic passage LORD CAIRNS
stated the principle thus: 'If the person sought to be taxed
comes within the letter of the law he must be taxed,
however great the hardship may appear to the judicial mind
to be. On the other hand, if the Crown seeking to recover
the tax, cannot bring the subject within the letter of the law,
the subject is free, however apparently within the spirit of
law the case might otherwise appear to be. In other words,
if there be admissible in any statute, what is called an
equitable construction, certainly, such a construction is not
admissible in a taxing statute where you can simply adhere
to the words of the statute.' VISCOUNT SIMON quoted with
approval a passage from ROWLATT, J. expressing the
principle in the following words: 'In a taxing Act one has to
look merely at what is clearly said. There is no room for any
intendment. There is no equity about a tax. There is no
presumption as to tax. Nothing is to be read in, nothing is to
be implied. One can only look fairly at the language used.'
Relying upon this passage LORD UPJOHN said: 'Fiscal
measures are not built upon any theory of taxation.'"
22. Recently, the Supreme Court again in the case of Checkmate
Services (P) Ltd. vs. CIT 4 reaffirmed the strict interpretation principles of
tax statues in paragraph Nos.55 and 57 of its judgment. Paragraph Nos.55
and 57 for ready reference are reproduced below:
"55. One of the rules of interpretation of a tax statute is that if a
deduction or exemption is available on compliance with certain
conditions, the conditions are to be strictly complied with. [ See
e.g., Eagle Flask Industries Ltd. v. CCE, (2004) 7 SCC 377] This rule
is in line with the general principle that taxing statutes are to be
construed strictly, and that there is no room for equitable
considerations.
57. The Constitution Bench, in Commr. of Customs v. Dilip Kumar &
Co. [Commr. of Customs v. Dilip Kumar & Co., (2018) 9 SCC 1]
endorsed as following : (SCC pp. 19 & 23-24, paras 24 & 34)
"24. In construing penal statutes and taxation statutes, the
Court has to apply strict rule of interpretation. The penal
statute which tends to deprive a person of right to life and
liberty has to be given strict interpretation or else many
innocents might become victims of discretionary decision-
making. Insofar as taxation statutes are concerned, Article
265 of the Constitution ["265. Taxes not to be imposed
save by authority of law.--No tax shall be levied or
collected except by authority of law."] prohibits the State
from extracting tax from the citizens without authority of
law. It is axiomatic that taxation statute has to be
interpreted strictly because the State cannot at their whims
(2023) 6 SCC 451
and fancies burden the citizens without authority of law. In
other words, when the competent legislature mandates
taxing certain persons/certain objects in certain
circumstances, it cannot be expanded/interpreted to
include those, which were not intended by the legislature.
***
34. The passages extracted above, were quoted with
approval by this Court in at least two decisions
being CIT v. Kasturi & Sons Ltd. [CIT v. Kasturi & Sons
Ltd., (1999) 3 SCC 346] and State of W.B. v. Kesoram
Industries Ltd. [State of W.B. v. Kesoram Industries Ltd.,
(2004) 10 SCC 201] (hereinafter referred to as Kesoram
Industries case, for brevity). In the later decision, a Bench
of five Judges, after citing the above passage from Justice
G.P. Singh's treatise, summed up the following principles
applicable to the interpretation of a taxing statute:
'(i) In interpreting a taxing statute, equitable
considerations are entirely out of place. A taxing statute
cannot be interpreted on any presumption or
assumption. A taxing statute has to be interpreted in the
light of what is clearly expressed; it cannot imply
anything which is not expressed; it cannot import
provisions in the statute so as to supply any deficiency;
(ii) Before taxing any person, it must be shown that he
falls within the ambit of the charging section by clear
words used in the section; and
(iii) If the words are ambiguous and open to two
interpretations, the benefit of interpretation is given to
the subject and there is nothing unjust in a taxpayer
escaping if the letter of the law fails to catch him on
account of the legislature's failure to express itself
clearly.'"
23. The Supreme Court further in the case of Royal Hatcheries (P) Ltd.
v. State of A.P. 5 dealing with the interpretation of livestock in tax rules held
as under:
"5. Having regard to the relevance of the language employed in Rule
5(2)(xxvi), it would be appropriate to set out the same over again
here. It reads : "Livestock, that is to say, all domestic animals such as,
oxen, bulls, cows, buffaloes, goats, sheep, horses etc." The clause
opens with the word, 'livestock', but it does not stop there. Had it
stopped there, there could be no doubt that day-old chicks or for that
matter, older chicks and chicken would have certainly fallen within the
ambit of the expression 'livestock' and would have been taxable at
purchase point. But the clause proceeds further and restricts the ambit
of the expression "livestock" to domestic animals referred to therein.
That is the effect of the words "that is to say". The meaning and
purport of the words "that is to say" is explained by this Court
in Rajasthan Roller Flour Mills Assn. v. State of Rajasthan [1994 Supp
(1) SCC 413 : JT (1993) 5 SC 138] . They are words of limitation. In
other words because of the use of the said words, the livestock
contemplated by the said clause becomes confined to the domestic
animals referred to in the said clause. 'Livestock' is, ordinarily
speaking, not confined to domestic animals. As held in Peterborough
Royal Foxhound Show Society v. IRC [20 Tax Cases 249 : (1936) 1 All
ER 813] the word 'livestock' takes in 'animals' of any description. But
1993 SCC OnLine SC 10
the rule-making authority chose to limit the meaning of 'livestock' in
the said clause only to domestic animals mentioned therein. Yet again,
the clause does not stop with the words "all domestic animals". It
proceeds further and goes on to illustrate the meaning of the
expression "all domestic animals" by mentioning some of them,
namely oxen, bulls, cows, buffaloes, goats, sheep and horses and then
ends with the word "etc.". This could not have been without a purpose.
It could only be to indicate the type of domestic animals the rule-
making authority had in mind. Why did the rule-making authority not
mention a single bird, while mentioning so many animals? It is true,
the words "such as" indicate that what are mentioned thereafter are
only illustrative and not exhaustive. The clause also ends with the
word "etc.", which does mean that some more domestic animals in
addition to those specifically mentioned therein are also included
within the meaning the words "all domestic animals". But the question
still remains, whether day-old chicks were contemplated as included
within the clause? In other words, whether chicks can be called
'domestic animals' so as to fall within the purview of the said clause?
19. We may now proceed to answer the question arising for our
consideration in the light of the decisions and other material referred
to above. We have hereinbefore analysed the clause in para 5. It is
enough to reiterate here that clause (xxvi) of Rule 5(2) does not cover
all "livestock". It covers only that 'livestock' which answers the
description "domestic animals". In popular and common parlance, day-
old chicks -- or for that matter, chicks -- are not referred to or
understood as 'animals', though in its literal sense, the word 'animal'
refers to any and every 'animate' object as distinct from inanimate
objects. The wider interpretation placed upon the said word
in Bridge v. Parsons [(1863) 32 LJMC 95] must be understood having
regard to the object and purpose of the enactment concerned therein
viz., prevention of cruelty to animals. For that reason, cock-fights were
held to be covered by the enactment. The principle of this decision
cannot be applied mechanically to every situation, more so to a taxing
provision like the one concerned herein. The several decisions cited by
Shri C. Sitaramiah show that words of this nature are construed having
regard to the context and the object underlying the enactment. For
example, in Casher v. Holmes [109 ER 1263 : (1831) 2 B & Ad 592
(KB)] arising under an enactment levying duties on several articles,
'metals' were construed as not including gold and silver. It was held
that gold and silver are popularly referred to as precious metals and
not as 'metals'. This brings to our mind another illustration. Diamonds
are stones so are there several semi-precious stones used in carvings
in marble. They are referred to as precious or semi-precious stones.
When one speaks of stones, he does not mean to include the precious
and semi-precious stones therein -- unless, of course, the context
drives him to do so. Coming back to the popular sense, chicks are
referred to as 'birds' -- not as 'animals'. That this is the sense in which
the said word is used is borne out by the type of animals mentioned in
the clause by way of illustration. All of them are animals -- domestic
animals, to wit, oxen, bulls, cows, buffaloes, goats, sheep and horses.
It is significant to notice that not one of them belongs to the birds'
category. No doubt, the word 'etc.' follows the said words but then in
the context, it would be reasonable and appropriate to say that while
animals like dogs and cats -- without trying to be exhaustive -- may
be covered by the said clause by virtue of the word "etc.", chicks
cannot certainly be included therein. To do so would be to depart from
and ignore the ordinary popular connotation of the words "domestic
animals" besides doing violence to the spirit and structure of the
clause. The use of the word "all" preceding "domestic animals" does
not make any difference. It only means all domestic animals of the
type mentioned therein -- all of which are quadrupeds. If birds are
also included in the clause, the very purpose of giving the illustrations
disappears. Those words in the clause would become superfluous.
Such an interpretation ought not to be adopted except perhaps to
avoid an absurd result. For all the above reasons, we hold, in
agreement with the High Court, that the chicks sold by the appellants
are not included within clause (xxvi) of Rule 5(2) of the A.P. General
Sales Tax Rules."
24. Whereas, in the case of State of Andhra Pradesh vs. Bhagya
Lakshmi Hatcheries Pvt. Limited 6, the unified High Court of Andhra
Pradesh took different views on whether poultry constitutes livestock in
paragraph Nos.10 to 14. Paragraph Nos.10 to 14 of the said judgment, are
again for ready reference reproduced hereunder:
"10. Apart from the Obiter dictum of the Supreme Court, we may
independently consider the question whether chicks which belong to
the category of poultry are livestock. There is abundant authority in
the form of dictionaries, publications dealing with livestock and
poultry, statutory enactments concerning livestock, including the
notifications issued under taxation statutes which proceed on the basis
that poultry is livestock. We may refer to few of them.
11. In the dictionaries, the following meanings of "livestock" are given:
The Chambers 21st Century Dictionary defines "livestock" as under:
2000 SCC Online AP 557
"Domesticated animals, especially sheep, cattle, pigs and poultry kept
for the production of meat, milk, wool, etc., or for breeding purposes".
Black's Agricultural Dictionary, II Edition, defines "livestock" to mean
"domesticated animals such as cattle, horses, pigs, poultry, sheep,
etc."
*Here italicised.
In Venkataramaiya's Law Lexicon with Legal maxims II Edition refers
to the publication titled Legislative Drafting & Forms by Six Alison
Russel, page 208 "livestock" is defined as under:
"(a) Cattle, sheep, goat, swine, horses or poultry and for the purposes
of this definition 'cattle' means cows, oxen, calves and 'poultry' means
domestic fowls, turkey, goose or ducks.
(b) Any creature kept for the production of food, wool, skin, fur or for
the purposes of its use in the farming by man.
Livestock includes horse, cattle, sheep, goats, swine, mules, donkey
and poultry".
In Ramanatha Aiyer's Law Lexicon, it is said that "livestock" is
restricted in its meaning so as to include only something which is
either a mammal or a bird".
In the book 'The Livestock Industry in Less Developed Countries'
published by the Food and Agriculture Organisation of the United
Nations, poultry industry is also dealt with.
In the Foreword to the book 'Indian Poultry Industry Year Book', 10th
Edition published by Government of India, it is stated that amongst the
livestock-based vocations, poultry occupies a pivotal position.
From the book "Indian Poultry Industry Year Book," it is seen that
livestock census includes poultry population.
In the book published by Indian Standards Institution-"Standards on
Poultry", day-old chicks is dealt with under the topic "livestock".
12. In the decision in Peterborough Royal Foxhound Show Society's
case 20 Tax Cases 249; 2 K.B. 497, cited with approval by the
Supreme Court, it was observed as follows:
"......The words 'livestock' are ordinarily and properly used in contrast
with dead stock and include all live animals and birds the breeding of
which is regulated by man."
In the "Words and Phrases Legally Defined", by Saundes 'livestock' is
defined as "cattle, sheep, goats, swine, horses, or poultry and for the
purposes of this definition 'cattle means bulls, cows, oxen, heifers or
calves, 'horses' includes asses and mules, and 'poultry' means
domestic fowls, turkeys, geese or ducks".
13. In Wardhough (A.F.) Ltd. v. Mace (1952) 2 All ER 28, Lord
Goddard defined "livestock" as under:
"Livestock generally means live animals. If the live and dead stock on
a farm are advertised for sale, everybody knows what that means. The
dead stock are implements; the livestock are the animals on the farm
and I should think that in the great majority of cases at any rate it
would include and would be thought to include the poultry on the
farm".
14. These dictionaries, publications on the subjects of 'livestock' and
poultry and the judicial opinion, all go to show that livestock is
understood in a broad sense to refer to poultry as well. Thus, even in
popular understanding, livestock includes poultry."
25. In the case of Glaxo Laboratories (India) Ltd. v. State of Gujarat 7
the Gujarat High Court examined the meaning of cattle feed and poultry feed
in the context of taxation entries and held as under:
"10. According to Corpus Juris Secundum, Volume 36, page 631, the
said word "as a noun is used as referring to articles to be fed to
animals, particularly domestic animals". In Webster's New Twentieth
Century Dictionary (Unabridged), at page 671, several meanings of the
word "feed", when used as a noun, are given. The appropriate
meanings, as applicable in the context of the use of the said noun in
the entries in question, however, are as follows:"(1) food given to
animals; fodder; pasture; (2) the customary amount of fodder given at
one time; as, to carry on a journey two feeds of oats; and (6) a meal."
In the Oxford English Dictionary, Volume IV, at page 130, various
meanings of the word "feed" are given and out of them only the
following meanings appear to be relevant:"(3) Food (for cattle);
fodder, provender; (4) A meal; a sumptuous meal; a feast." It would
thus appear that etymologically the word "feed" means animal food or
fodder.
11. In the two entries in question, the word "feed" is used in
conjunction with another word, namely, "cattle" in entry 21 and
"poultry" in entry 25. Besides, in entry 21 there are words of inclusion
as well as of exclusion following upon the word "cattle-feed". Under
these circumstances, it appears to us that the correct way of
approaching the matter would be to read the expressions "cattle-feed"
and "poultry-feed" as a whole and to read the former expression in the
context of the words which follow. When so read, one thing at least is
clear that the goods which are intended to be covered by both these
1978 SCC OnLine Guj 102
expressions are those which are meant for consumption by animals or
birds, as the case may be, which are more often than not reared for
commercial purposes.
12. The word "cattle-feed" has acquired a precise meaning in the field
of live-stock farming and so also has the word "concentrates". In the
book entitled "Nutritive Values of Indian Cattle Feeds and the Feeding
of Animals" by Shri K.C. Sen, which has been published by the Indian
Council of Agricultural Research, New Delhi, Chapter I, entitled
"Nutrition of Animals", deals with the feeding stuffs of animals. It is
there pointed out that food is essential for the maintenance of life. The
nutrients in a feeding stuff enable the animal body to maintain energy,
to perform the vital processes of life and provide the material to
replace the essential tissues breakdown which occurs in the body
continuously. Food also provides the constituents and the energy
required for body growth. All feeding stuffs are composed of water,
and organic and mineral matter. Organic matter is composed of
proteins, fats, crude fibre and soluble carbohydrates. Besides the
above, there are certain substances known as vitamins, which are
considered to be essential for the proper nutrition of farm stock. Of
these, the more important ones, from the point of view of cattle
nutrition, are vitamins A and D, because these have to be supplied to
the animals through their feed; but vitamins B and C can be
synthesized in the ruminant body. The learned author proceeds to
point out that the ration of an animal may be divided for convenience
into two parts, one for maintenance ration is that portion of the diet
which just enables the animal at rest to carry on the essential
processes of life, such as breathing and circulation of blood, without
either gain or loss of weight. As, however, no animal is kept in a farm
in a state of non-production, the requirements for maintenance form
only a convenient basis for the calculation of rations for productive
purposes. Whatever is supplied to the animal over and above its
maintenance requirement is available for production, such as for
growth or fattening, for production cf calf, for production of milk or for
output of work. These observations contained in a standard book
published by the Indian Council of Agricultural Research establish two
things : first, that in the context of live-stock, which is not intended to
be kept in a state of non-production, food consi sts not only of that
constituent which is essential for the maintenance of life but also of
the other constituents which provide the energy required for
production, be it the production of calf, or milk or output of work and,
secondly, that vitamins are considered essential for the proper
nutrition of farm stock and some of the vitamins like vitamins A and D
have to be supplied to the animals through their feed. If this concept
of cattle-feed is borne in mind, it would become immediately clear that
the said expression is not understood by the people conversant with
the rearing of live-stock as merely consisting of ration for maintenance
but also as comprehending ration for production purposes.
24. It is true that the common parlance test was applied in the said
decision and that to that extent the decision is in point. However,
beyond that no assistance can be derived from this decision for
determining the meaning of the word "cattle-feed" or "poultry-feed".
Foodstuff or food provision for human beings has a definite meaning in
common parlance and it cannot possibly include articles like Limical
which have special use and properties. One cannot possibly serve as
foodstuff or food provision Limical to a guest at dinner or lunch.
"Cattle-feed" and "poultry-feed", however, are words which are used in
the context of the mixed feed of live-stock and poultry, both of which
are reared for production purposes not only domestically but also
commercially. From what has been stated above, it becomes clear that
even in its popular sense, that is to say, the sense in which people
conversant with live-stock farming and poultry raising and those
dealing in cattle-feed or poultry-feed would attribute to those words,
ration for production, such as feed additives or supplements like
proteins, minerals, vitamins, etc., would truly constitute "cattle-feed"
or "poultry-feed", as the case may be. In such a context and in view of
the setting of the word "cattle-feed" in the company of the word
"concentrates", it would be difficult to reach the conclusion at which
the Tribueal arrived. The Tribunal's decision as to the true scope of the
entries in question in the instant case, relying upon its earlier decision,
therefore, is obviously not correct in law."
26. Lastly, in the case of State of A.P. vs. Coromandel Agro Products
and Oils Limited 8, the erstwhile High Court of Andhra Pradesh dealing with
the interpretation of vegetable oils in a tax entry has held as under:
"We need not go into the question of applicability of the Supreme
Court decision or the Allahabad High Court decision for resolving the
controversy in this case, because it can be decided on the language of
the entry itself. The entry relates to "vegetable oils" and the various
oils mentioned therein are only illustrative. The entry specifically says
"vegetable oils" including those mentioned therein. In the
circumstances, there is no warrant for placing the construction that the
said entry relates only to those vegetable oils which are edible. It
appears from the facts of the case that cotton seed sludge oil and
cotton seed acid oil is the residue after the cotton seed oil is refined,
i.e., what is known as "washed cotton seed oil" is taken away. This
1987 SCC OnLine AP 558
residue is usually sold and is used in the manufacture of soap as oil.
The mere fact that it is a residue left after the refined cotton seed oil is
taken away, or that it contains some residuary additives it does not
cease to be "vegetable oil". Having regard to the wide language used it
is not possible to restrict it only to edible vegetable oils. Apart from
this, groundnut oil which is also an edible oil is shown as a separate
entry 24. This also negatives the contention that entry 128 relates to
edible oils."
27. In everyday usage, there exists a clear distinction between horses and
cattle. Cattle specifically refers to domesticated bovine animals belonging to
the Bos genus, including cows, bulls, and calves. Horses, on the other hand,
belong to an entirely different biological classification - the Equus genus and,
which are classified as equids, not bovines. Under normal circumstances,
horses are considered livestock but remain a separate group from cattle.
However, Indian law demonstrates that the classification of animals,
including whether a horse qualifies as cattle, varies significantly depending
on the specific statute and its context. This is precisely where the Cattle
Trespass Act, 1871, creates a legal framework that expands the traditional
definition. Section 3 of the Cattle Trespass Act, 1871, contains an
interpretation clause that fundamentally broadens the scope of 'cattle'.
The provision explicitly states that:
""cattle" includes not only traditional bovines but also elephants,
camels, buffaloes, horses, mares, geldings, ponies, colts, fillies, mules,
asses, pigs, rams, ewes, sheep, lambs, goats and kids."
28. This legal expansion finds support in certain dictionary definitions.
While the Collins English Dictionary maintains the traditional narrow
definition stating that cattle are simply cows and bulls. However, the
American English definition, particularly in biblical usage, acknowledges a
broader interpretation. It defines cattle as bovine animals of the genus Bos,
but also extends to include "other domesticated quadrupeds, as horses,
swine, etc." Therefore, while biologically and colloquially horses remain
distinct from cattle, the Cattle Trespass Act legally transforms horses into a
subcategory of 'cattle' for purposes of that legislation. This statutory
inclusion creates a legal fiction whereby horses are treated as cattle under
the law.
29. Having established that horses are legally classified as cattle under the
Cattle Trespass Act, we can now understand why oats are properly
categorized as cattle feed. According to Stephen Boyles, The Ohio State
University & Ladon Johnson, North Dakota State University held that:
"Oats is lower in energy and more bulky than other common feed
grains since it threshes with the hull intact. The hull commonly
accounts for 24 to 30 percent of the weight of the oat kernel. Since oat
grain yield and quality are highest under relatively cool growing
seasons, it is produced and fed primarily in the northern part of the
Great Plains. Quality, as measured by bushel weight. commonly varies
inversely with temperatures during the kernel filling and ripening
period of the grain. A traditional pattern in movement of feed oats is
for high-quality, heavy-test-weight horse" oats to move from northern
producing areas to south and easterly directions. Energy content of
oats varies directly according to bushel test weight, which in turn is
dependent upon size of groat (whole seed minus the hull) and kernel
plumpness."
30. With regard to growing and finishing cattle, it was held that:
"Oats has earned the reputation of being a good "growing" feed but of
having lesser value than corn, barley, grain sorghum or wheat when
used as the major energy source in finishing rations. Oats is only
worth about 85 percent the value of corn or barley per ton when fed as
one-half or more of the grain diet for finishing cattle. Rations
containing very high levels of oats or even rations with no roughage do
not produce comparable gains to those of corn or barley. This is
particularly true during the last 40 to 60 days of the finishing period.
Good quality oats (35 pounds per bushel or heavier) can be used at
levels up to one-third of the concentrate intake in finishing type rations
without reducing rate of gain or markedly affecting feed efficiency.
Oats may have a place in all-concentrate diets as a supplement for
cereals which have low fiber contents."
31. The connection becomes clear through this logical chain that:
1) Horses are legally defined as 'cattle' under the Cattle Trespass Act;
2) Oats are traditionally and practically used as feed for horses;
3) Oats are also used as feed for beef cattle (traditional bovines); and
4) Since horses are legally cattle, and oats feed both horses and
traditional cattle, oats qualify comprehensively as "cattle feed".
This creates a unified category where oats serve as cattle feed not
merely because they feed traditional bovines, but because they feed the
entire legal category of 'cattle' as expanded by statute - including horses,
which have been brought within that definition by legislative decree. The
agricultural practice of using oats for both horses and traditional cattle
therefore aligns perfectly with the legal classification, making 'cattle feed' an
accurate and comprehensive description for oats under the relevant legal
framework.
32. Now we would like to refer to certain provisions of the APGST Act for
better understanding of the dispute. Firstly, Section 2(e) of the APGST Act
which defines the term 'dealer' is reproduced hereunder, viz.,
"dealer" means any person who carries on the business of buying,
selling, supplying or distributing goods or delivering goods on hire
purchase or on any system of payment by instalments, or carries on or
executes any works contract involving supply or use of material directly
or otherwise, whether for cash, or for deferred payment, or for
commission, remuneration or other valuable consideration, and
includes. -
(i) local authority, a company, a Hindu undivided family or any
society (including a cooperative society), club, firm or association
which carries on such business;
(ii) a society (including a cooperative society), club, firm or
association which buys goods from, or sells, supplies or distributes
goods to its members;
(iii) a casual trader, as herein before defined;
(iii)(a) any person, who may, in the course of business of running a
restaurant or an eating house or a hotel (by whatever name called).
supply by way of or as part of any service or in any other manner
whatsoever, of goods, being food or any other article for human
consumption or any drink (whether or not intoxicating);
(iii)(b) any person, who may transfer the right to the use of any
goods for any purpose whatsoever (whether or not for a specified
period) in the course of business to any other person;
(iv) a commission agent, a broker, a delcredere agent, an
auctioneer or any other mercantile agent, by whatever name called,
who carries on the business of buying, selling, supplying or
distributing goods on behalf of any principal or principals;
Explanation-I:--- Every person who acts as an agent of a non resident
dealer that is, as an agent on behalf of a dealer residing outside the
State, and buys, sells, supplies or distributes goods in the State or acts
on behalf of such dealer as -
(i) a mercantile agent as defined in the Indian Sale of Goods Act,
1930 (Central Act III of 1930); or
(ii)an agent for handling goods or documents of title relating to
goods, or
(iii) an agent for the collection or the payment of the sale price
of goods or as a guarantor for such collection or payment and every
local branch of a firm or company situated outside the State, shall be
deemed to be a dealer for the purpose of this Act.
Explanation-II:--- Where a grower of agricultural or horticultural
produce sells such produce grown by himself or grown on any land in
which he has an interest whether as owner, usufructuary mortgagee,
tenant or otherwise, in a form different from the one in which it was
produced after subjecting it to any physical, chemical or any process
other than mere cleaning, grading or sorting, he shall be deemed to be
a dealer for the purpose of this Act;
Explanation-III:--- The Central Government or the State Government
which, whether or not in the course of business, buys, sells, supplies or
distributes goods, directly or otherwise, for cash or for deferred
payment or for commission, remuneration or other valuable
consideration shall be deemed to be dealer for the purposes of this Act;
Explanation-IV:--- For the purpose of this clause, [each of the
following persons and bodies whether or not in the course of business
who sell or dispose of] [Substituted 'each of the following persons and
bodies who sell or dispose of' by Act No. 25 of 2002, dated
21.12.2002.] any goods including unclaimed or confiscated or
unserviceable goods or scrap surplus, old, obsolete, or discarded
material or waste products whether by auction or otherwise, directly or
through an agent for cash, or for deferred payment or for any other
valuable consideration shall be deemed to be a dealer to the extent of
such disposals or sales, namely:-
(a) The Port Trust;
(b) Municipal Corporation, and Municipal Councils, and other local
authorities;
(c) Railway administration as defined under the Indian Railways Act,
1890;
(d) Shipping, transport and construction companies;
(e) Air transport companies and airlines;
(f) Transporters, holding permits for transport vehicles granted under
the Motor Vehicles Act, 1988 which are used or adopted to be used
for hire;
(g) The Andhra Pradesh State Road Transport Corporation;
(h) Customs Department of the Government of India administering
the Customs Act, 1962;
(i) Insurance and Financial Corporations or Companies and Banks
included in the Second Schedule to the Reserve Bank of India Act,
1934;
(j) Advertising Agencies;
(k) Any other Corporation, Company body or authority owned or
set up by or subject to administrative control of the Central
Government or any State Government.
33. Section 5A of the APGST Act which deals with levy of tax on turnover
is also reproduced hereunder, viz.,
Section 5. Levy of tax on sales or purchases of goods:--- [(1)
Save as otherwise provided in this Act every dealer shall pay tax under
this Act for each year on every rupee of his turnover of sales or
purchases of goods in each year irrespective of the quantum of his
turnover at the rates of tax and at the points of levy specified in the
Schedules.]
(2) For the purpose of this section and the other provisions of this Act,
the turnover which a dealer shall be liable to pay tax shall be
determined after making such deductions from his total turnover, and
in such manner as may be prescribed.
(3) The taxes under this section shall be assessed, levied and collected
in such manner, as may be prescribed:
Provided that,---
(i) in respect of the same transaction, the buyer or the seller
but not both, as determined by such rules as may be
prescribed, shall be taxed.
(ii) where a dealer has been taxed in respect of the purchase
of any goods, in accordance with the rules referred to in
clause (i) of this proviso, he shall not be taxed again in
respect of any sale of such goods effected by him."
34. Section 5-C of the APGST Act which deals with tax in respect of supply
of articles of food or drinks in restaurants or catering houses or hotels is also
reproduced hereunder, viz.,
[Section 5-C. Tax in respect of supply of articles of food or drink
in restaurants or catering houses or hotels:--- Every dealer
running any restaurant or eating house or hotel (by whatever name
called), who supplies, by way of or as part of any service or in any
other manner whatsoever of goods, being food or any other article for
human consumption or any drink (whether or not intoxicating) and
whether or not such goods have suffered tax under the Act. where such
supply or service is for cash, deferred payment or other valuable
consideration shall on the total amount charged by the said dealer for
such supply, pay a tax at the rate of eight paise on every rupee on the
aggregate of such amount realised or realisable by him during the year:
Provided that no such tax shall be levied if the total turnover of the
dealer including such aggregate during the year is less than
Rs.2,00,000.]
35. Section 5-E of the APGST Act deals with tax on the amount realized in
respect of any right to use goods is also reproduced hereunder, viz.,
[Section 5-E. Tax on the amount realised in respect of any right
to use goods:--- Notwithstanding anything contained in this Act,---
(a) Every dealer who transfers the right to use any goods for any
purpose, whatsoever, whether or not for a specified period, to any
lessee or licensee for cash, deferred payment or other valuable
consideration, in the course of his business shall, on the total amount
realised or realisable by him by way of payment in cash or otherwise on
such transfer or transfers of the right to use such goods from the lessee
or licensee, pay a tax at the rate of eight paise on every rupee of the
aggregate of such amount realised or realisable by him during the year.
(b) the transfer of right to use any such goods entered into by any
dealer, shall be deemed to have taken place in this State whenever the
goods are used within the State, irrespective of the place where the
agreement whether written or oral for such transfer of right is made.
Provided that no such tax shall be levied if the total turnover of the
dealer including such aggregate is less than rupees two lakhs.]"
36. Other Sections of the APGST Act which have to be taken into
consideration are Section 6 dealing with tax in respect of declared goods and
Section 6-A dealing with levy of tax on turnover relating to purchase of
certain goods. For ready reference, Section 6 and Section 6-A are
reproduced hereunder, viz.,
6. Tax in respect of declared goods:--- Notwithstanding anything
contained in section 5, the sales or purchases of declared goods by a
dealer shall be liable to tax at the rate, and only at the point of sale or
purchase specified against each in the third Schedule on his turnover of
such sales or purchases for each year irrespective of the quantum of his
turnover in such goods; and the tax shall be assessed levied and
collected in such manner as may be prescribed.
[Provided that where any such goods on which a tax has been so
levied are sold in the course of inter State trade or commerce. and tax
has been paid under the Central Sales Tax Act, 1956 in respect of the
sale of such goods in the course of inter State trade or commerce the
tax so levied, ( shall be reimbursed to the person making such sale in
the course of inter State trade or commerce,) in such manner and
subject to such conditions as may be prescribed.]
[6-A. Levy of tax on turnover relating to purchase of certain
goods:--- Every dealer, who in the course of business,---
(i) purchases any goods (the sale or purchase of which is liable to
tax under this Act) from a registered dealer in circumstances in
which no tax is payable under section 5 or under section 6, as the
case may be, or.
(ii) purchases any goods (the sale or purchase of which is liable to
tax under this Act) from a person other than a registered dealer, and
(a) consumes such goods in the manufacture of other goods for
sale or consumes them otherwise, or:
(b) disposes of such goods in any manner other than by way of
sale in the State or.
(c) despatches them to a place outside the State except as a
direct result of sale or purchase in the course of inter State
trade or commerce,
shall pay tax on the turnover relating to purchase aforesaid at the same
rate at which but for the existence of the aforementioned
circumstances, the tax would have been leviable on such goods under
Section 5 or Section 6.
37. Following this, reference is made to the First Schedule of the APGST
Act which specifies the goods subject to single-point taxation under Entry 80
of the said Schedule. For ready reference, Entry 80 is reproduced below:
Sl.No. Description of Goods Point of Levy Rate of Tax
1. 2. 3. 4.
xxx xxx xxx xxx
80. Poultry feed and Cattle feed At the point of first sale in State 4 paise in the rupee
38. Next, attention is invited to the Third Schedule of the APGST Act,
which specifies the goods subject to single-point taxation under Section 6.
Entry 20 of this Schedule pertains to various types of cereals, and the
corresponding point of levy and rate of tax are reproduced below:
Sl.No. Description of Goods Point of Levy Rate of Tax
1. 2. 3. 4.
xxx xxx xxx xxx
20. Cereals, that is to say, At the point of first sale 2 paise in the rupee
(i) bajra (Pennisetum typhoideum L.) in the State
(ii) kodun (Pasipalum sere biculatum L.)
(iii) kutki (Panicum Limmaire L.)
(iv) barley (Hordeum vulgare L.)
39. It is evident from the above definition and the elaborate interpretation
that the respondent does not fall within the definition of 'dealer' as
contemplated under Section 2(e) of the Act. The respondent's activities are
undertaken solely for charitable purposes, and any income generated from
the sale of oats is utilized exclusively for furthering these charitable
objectives rather than for commercial gain or profit. The essence of being a
'dealer' under the APGST Act presupposes carrying on business with a profit
motive or for valuable consideration in the commercial sense. Since the
respondent's operations are driven not with profit intent and the funds are
applied towards charitable purposes, the respondent cannot be classified as
a dealer within the meaning of the APGST Act. This interpretation is
consistent with the legislative intent to exclude charitable organizations from
the purview of commercial taxation when their activities are not conducted
for profit.
40. Furthermore, it is important to note that the respondent sells oats to
trainers who exclusively use it as feed for their horses. In examining the
nature of horses within the legislative framework, reference must be made
to the Cattle Trespass Act, 1871, which explicitly includes horses within the
definition of 'cattle' or 'livestock'. The judicial pronouncements cited above,
particularly the decision in Glaxo Laboratories (India) Ltd. (supra) and
the analysis of livestock definitions across various statutory instruments and
authoritative publications establish that livestock encompasses horses along
with other domestic animals. The Supreme Court's observation that
'livestock' includes all live animals and birds and the breeding of which is
regulated by man, leaves no room for doubt that horses constitute cattle for
the purposes of livestock and cattle feed provisions. Consequently, oats
supplied by the respondent to trainers for feeding horses must be regarded
as cattle feed in its true legislative and it sense.
41. The classification of oats as cattle feed is a matter of legislative
interpretation that must be guided by the principle that entries in taxing
statutes should not be read in a narrow or restricted sense. It is well
established that each general word in a legislative schedule should be held
to extendable to all the ancillary or subsidiary matters which can fairly and
reasonably be said to be comprehended within it.
42. In the present case, oats fall squarely within the ambit of Schedule 1
of Entry 80, which explicitly provides for 'Poultry feed and cattle feed'. This
entry is broad enough to encompass all forms of feed meant for livestock,
including oats commonly used as nutritional feed for horses and other cattle.
Conversely, Entry 20 of Third Schedule enumerates specific cereals such as
bajra, kodon, kutki, and barley, and does not include oats within its purview.
The absence of oats from this specific enumeration cannot be construed as
an exclusion from the broader category of cattle feed under Entry 80 of First
Schedule. The legislative intent behind these entries is to distinguish
between cereals meant for human consumption or general commercial
purposes and those which serve as cattle feed. Applying the principle of
liberal interpretation, oats, when used as feed for horses and other livestock,
must be classified under Entry 80 of First Schedule. This interpretation is
consistent with the judicial approach that taxing entries should be construed
in a manner that gives effect to their plain meaning and purpose, without
imposing artificial restrictions that defeat the legislative objective.
43. Another aspect which comes in the mind of the Bench in the course of
deliberation is that Entry 80 of First Schedule purely reflected "poultry feed
and cattle feed" both had to be given a wide and exhaustive interpretation.
More so for the reason that the said schedules stood amended vide Act
No.27 of 1996, w.e.f. 01.08.1996, and in the process Entry 80A and Entry
80B were introduced. For ready reference, Entry 80A and Entry 80B are
reproduced hereunder:
Sl.No. Description of Goods Point of Levy Rate of Tax
1. 2. 3. 4.
xxx xxx xxx xxx
80-A. Feed supplements, nutrients, At the point of first sale in State 8 paise in the rupee
Mineral mixture, vitamins,
medicines, and any other
category of food supplements
which are used in poultry feed,
fish feed, prawn feed and feed
For livestock.
80-B. Fish feed and prawn feed for At the point of first sale in State 4 paise in the rupee
livestock other than cattle.
A bare perusal of the aforesaid Entries would go to show that
according to the law, as it existed prior to 01.01.2000, all those items which
are reflected in the newly brought in Entry 80A and Entry 80B were all
inclusive in the original Entry 80. This in other words also means that feed
for livestock was not earlier there in any of the Schedules and therefore feed
for livestock also would automatically have to be brought within the ambit of
cattle feed. If feed for livestock was not part of cattle feed, the necessity of
incorporating Entry 80A and Entry 80B was not necessary. This also means
that if it had become necessary and hence it was segregated as a specific
Entry, this itself forces this Bench to also consider that it was earlier part of
cattle feed itself.
44. For this reason also the arguments advanced by the learned Special
Standing Counsel for Commercial Tax does not have any strong ground to
stand.
45. For all the aforesaid reasons, the Tax Revision Case No.105 of 2010
filed by the State being devoid of merit deserves to be and is accordingly
dismissed. Consequently, the other batch of Tax Revision Cases also stand
dismissed.
46. As a sequel, miscellaneous petitions pending if any, shall stand closed.
However, there shall be no order as to costs.
_____________
P.SAM KOSHY, J
_________________________
NARSING RAO NANDIKONDA, J
Date: 13.11.2025
Note: LR copy to be marked.
(B/o)GSD
