Case Note & Summary
The dispute arose from the classification of biscuits for sales tax purposes under the U.P. Sales Tax Act, 1948. The appellant, a registered firm engaged in manufacturing biscuits, contended that their turnover should be taxed at a lower rate of 2% applicable to 'cooked food' as per a notification issued on October 6, 1971. The assessing authority rejected this claim, imposing a higher tax rate of 3.5% on the turnover, classifying biscuits as an unclassified commodity. The appellant's appeals to the Deputy Commissioner and the Judge (Appeal) Sales Tax were unsuccessful, leading to an appeal to the Supreme Court. The core legal question was whether biscuits could be considered 'cooked food' under the relevant notification. The appellant argued that biscuits, being baked, should fall under the definition of cooked food. However, the Court noted that in common parlance, biscuits are not regarded as cooked food, and the Hindi version of the notification reinforced this interpretation. The Court cited previous judgments that supported the view that biscuits do not qualify as cooked food. Ultimately, the Supreme Court upheld the lower courts' decisions, dismissing the appeal and affirming the classification of biscuits as an unclassified commodity subject to the higher tax rate.
Headnote
A) Sales Tax - Classification of Goods - Definition of 'Cooked Food' - U.P. Sales Tax Act, 1948, Section 3-A(2) - The Court held that 'biscuit' cannot be classified as 'cooked food' as per the notification, since it is not understood as such in ordinary parlance in Uttar Pradesh. The item was correctly treated as an unclassified commodity and taxed accordingly (Paras 151F-G-H).
Issue of Consideration
Whether 'cooked food' includes 'biscuits' under the U.P. Sales Tax Act, 1948
Final Decision
The Supreme Court dismissed the appeal, affirming the classification of biscuits as an unclassified commodity and upholding the higher tax rate of 3.5%. No costs were awarded.
Law Points
- Sales Tax classification
- ordinary parlance interpretation
- cooked food definition
