Allahabad High Court
Mansarovar Bottling Company Limited, ... vs Commissioner Of Trade Tax on 24 January, 2005
Author: Rajes Kumar
Bench: Rajes Kumar
JUDGMENT Rajes Kumar, J.
1. Present revision under Section 11 of U.P. Sales Tax Act (hereinafter referred to as "Act") is directed against the order of the Tribunal dated 30th December, 1994 arising out of the proceedings under Section 35 of the Act.
2. Brief facts of the case are that the applicant manufactures fruit juice called Maaza. It moved an application before the Commissioner of Trade Tax under Section 35 of the Act to know the rate of tax applicable to Maaza. It was claimed that Maaza was liable to tax at the rate of 6 percent under the entry "milk powder, condensed milk, baby milk, baby foods and all other food stuffs or products, whether used as such or after mixing them with any other food stuff or beverage, when sold in sealed or tinned containers of the Notification No. ST-II-5785/X-10(1)-80-UP. Act XV/48-Order-81 dated 07.09.1981 being food stuff and not under the entry 63 of Notification No. ST-II-5905/X-6(1)-83-UP.Act 15/48-Order-83 dated 12.10.1983 as fruit juice and other soft beverages under which the assessing authority was proposing to levy the tax. It was explained that during the manufacturing process empty bottles were washed in the solution of caustic soda and tri sodium phosphate. Bottles were then cleaned and rinsed with fresh water and conveyed to the filling machine. Sugar is converted into sugar syrup and is purified with activated carbon. Mango pulp which is about 15 percent of the product, is obtained from outside and is diluted with sugar syrup. It is blended with flavour and other additives to get mango beverages. It is further alleged that the ratio of main raw material for manufacturing of 400 crates (one crate consists of 20 bottles of 250 M.L) each is as follows.
1. Essence : one unit.
2. Sugar : 325 kgs.
3. Crown Corks : 66.67 gross.
4. Alphonso Mango pulp : 52.50 Kgs.
5. Totapuri Mango pulp : 315.00 Kgs.
Citric Acid : 5 kg.
3. Additional Commissioner treated the Maaza falling under Notification No. 5909 dated 12.10.1983 and held liable to tax at the rate of 12 percent as fruit juice and other soft benerages. Being aggrieved by the order of the Additional Commissioner, applicant filed appeal before the Tribunal. Tribunal upheld the order of the Commissioner of Trade Tax and dismissed the appeal by the impugned order.
4. Heard Sri Bharat Ji Agarwal, learned counsel for the applicant and Sri U.K. Pandey, learned Standing Counsel.
5. Learned counsel for the applicant submitted that the contents of Maaza shows that it was food stuff and therefore, liable to tax at the rate of 6 percent under Notification No. ST-II-5785/X-10(1)-80-UP. Act XV/48-Order-81 dated 07.09.1981. Learned Standing Counsel submitted that Maaza was a fruit juice and not food stuff. He submitted that expression "food stuff" comprehends "cooked food". He further submitted that Maaza being fruit juice and liquid used for drinking purposes in a party is a beverage and, therefore, covered under entry No. 63 of Notification No. ST-II-5905/X-6(1)-83-UP.Act 15/48-Order-83 dated 12.10.1983.
6. I have perused the order of the Tribunal and the authorities below and considered the rival submissions of the patties.
7. Both the Notifications reads as follows.
Notification No. ST-II-5785/X-10(1)-80-UP. Act XV/48-Order-81 dated 07.09.1981.
"Milk powder, condensed milk, baby milk, baby foods and all other food stuffs or products, whether used as such or after lmixing them with any other food stuff or beverage, when sold in sealed or tinned containers".
Notification No. ST-II-5905/X-6(1)-83-UP.Act 15/48-Order-83 dated 12.10.1983.
"Soda water, lemonade, fruit-juices and other soft beverages and syrup, squashes, jams and jellies"
8. The word "food stuff" came up for consideration before the Hon'ble Supreme Court in the case of Welcome Hotel v. State of Andhra Pradesh, AIR 1983 SC 1015 the Apex Court held as follows.
"Further the expression 'food' has generally be understood to mean nutritive material absorbed or taken into the body of an organism which serves for purposes of growth, work or repair and for the maintenance of the vital process. What human beings consume is styled as food and what animals consume is described as animal feed. This distinction has to be borne in mind. Expression 'foodstuffs' is made of two expressions, 'food' plus 'stuffs'. In other words, the stuff which is used as food would be foodstuff. Therefore, foodstuff is that which is taken into the system to maintain life and growth and to supply waste of tissue. If the raw foodstuff with a view to making it consumable by human beings undergoes a change of its condition by the process of cooking, the derivative is nonetheless foodstuff. If raw rice is foodstuff, does rice when boiled in water cease to be foodstuff.........
Therefore, the expression 'foodstuff' as under 5 Act comprehends cooked food."
9. The expression 'foodstuff' has also been considered by the Apex Court in the case of Sat Pal Gupta v. State of Haryana, AIR 1982 SC 798 as follows.
"The word 'foodstuff' which occurs in Clause (v) of Section 2 (a) is not defined in the Act and therefore, it must receive its ordinary and natural meaning, that is to say, a meaning which takes account of and accords with the day-to-day affairs of life. Cattle and poultry are living components of the natural environment and there is no reason to exclude that which they eat or feed upon, from the meaning of the word 'foodstuffs'. If, what the human beings eat is food, so is what the other living beings eat. 'Cattle fodder' is expressly brought with the compass of essential commodities by Clause (i) of Section 2 (a). It would be illogical if, in that context, rice bran is excluded from the purview of essential commodities on the ground that it is eaten by the poultry and not by Homo Sapiens."
10. In the case of Collector of Central Excise, Bombay v. Parle Exports (p) Ltd (1989) 75 STC 105, question for consideration before the Apex Court was whether non-alcoholic beverage bases like Gold Spot base, Limca base or Thumps-up base are either 'food product' or 'food preparation' in terms of the exemption notification issued under Rule 8 of the Central Excise Rules, 1944. The Apex Court observed as follows.
"In this case, therefore, it is necessary to endeavour to find out the true intent of the expressions 'food products and food preparations', having regard to the object and the purpose for which the exemption is granted hearing in mind the context and also taking note of the literal or common parlance meaning by those who deal with those goods, of course bearing in mind, that in case of doubt only it should be resolved in favour of the assessee or the dealer avoiding, however, an absurd meaning. Hearing the aforesaid principles in mind, in our opinion, the Revenue is right that the non-alcoholic beverage bases in India cannot be treated or understood as new 'nutritive material absorbed or taken into the body of an organism which serves for the purpose of growth, work or repair and for the maintenance of the vital process' and an average Indian will not treat non-alcoholic beverage bases as food products of food preparations in that light."
(Emphasis supplied).
11. In the case of Commissioner of Sales Tax v. V.L. Industries reported in 112 STC 311, the Division Bench of the Bombay High Court has considered the expression 'foodstuff' as follows.
"The dictionary meaning of these expressions is also in no way different than the common parlance meaning. According to Oxford Advance Learner's Dictionary "food" means any substance that people or animals eat or drink or plants take in to maintain life and growth. Foodstuff has been described as any substance used as food. Similarly, in Random House Dictionary of English language, food has been described as any nourishing substances that is eaten or otherwise taken into the body to sustain life, provide energy, provide growth. Foodstuff has been described as a substance used or eatable of being used as a nutriment. Food provisions also conveys similar meaning."
12. In Webster's 3rd International Dictionary 'food' is defined as nutritive material absorbed or taken into the body off an organism which serves for purposes of growth, work or repair and for maintenance of the vital process.
13. In view of the above decisions, Maaza which is a fruit juice cannot be said to be foodstuff. It is taken as a soft drink just to satisfy thrust and not to maintain life and growth.
14. "Beverage", as commonly understood, means "any liquid for drinking other than water. It is a name applied to drinks." In Webster's 3rd International Dictionary, "beverage" has been described as "liquid for drinking especially such liquid other than water (as tea, milk, fruit juice, beer) usually prepared (as by flavouring, heating, admixing) before being consumed". The Random House Dictionary of the English language (College Edition) describes "beverages" as "any liquid for drinking especially such liquid other than water". Therefore, foodstuff is that which is taken into the system to maintain life and growth and to supply waste of tissue.
15. In the case of Hamdard (Wakf) Laboratories v. Collector of Central Excise reported in (1999) 6 Supreme Court Cases 677, Rooh Afza which is in the liquid form has been held as beverages.
16. In view of the definition of the word 'foodstuff, food beverage' and the decision of the Apex Court, in my view "Maaza" falls under "fruit juice and other beverages" under Notification No. ST-II-5905/X-6(1)-83-UP.Act 15/48-Order-83 dated 12.10.1983 and not under Notification No. ST-II-5785/X-10(1)-80-UP.Act XV/48-Order-81 dated 07.09.1981 as other foodstuffs. The view of the Tribunal and the Commissioner of Trade Tax are upheld.
17. In the result, revision fails and is, accordingly, dismissed.