The main legal point established in the judgment is the interpretation of the term 'cooked food' under the M.P. Commercial Tax Act, 1994, and its application to the classification of goods for tax assessment.

JUDGMENT:

KAPADIA, J.

This civil appeal by grant of special leave petition concerns classification dispute. According to the assessee fryums fall under item No.2 of Part I of Schedule II which refers to cooked food and in which case the rate of tax is 4%. On the other hand, according to the Department the item fryums falls under Part VII of Schedule II to the M.P. Commercial Tax Act, 1994, under which the rate of tax is 8% (earlier it was 6%)

The short question, therefore, which arises for determination in this civil appeal is the meaning of the term cooked food in M.P. Commercial Tax Act, 1994. Though the expression cooked food has been defined under Section 2(g) of the said 1994 Act in this civil appeal we are concerned with the Assessment Years 1992-93 and 1993-94. It is made clear that the assessee is a registered dealer under M.P. General Sales Tax Act 1958 and thereafter under M.P. Commercial Tax Act, 1994. It is not in dispute that the assessee has been assessed under the above entries of the 1994 Act. This is because the 1958 Act stood replaced by the 1994 Act and the original assessment made under the 1958 Act have been treated to have been made under the 1994 Act.

On 12th March, 1996 the Assistant Commissioner, Indore, assessed sale of fryums at 8% sales tax under the residuary entry referred to above. He demanded tax of Rs.1.33 lakhs (rounded off) for the Assessment Years 1.4.92 to 31.3.93. The Commissioner of Commercial Tax, in an application made under Section 68 of the 1994 Act held that fryums were neither Namkeen nor cooked food nor papad nor cereals, and therefore, they were taxable under the above residual entry of Part VII of Schedule II of the 1994 Act. On 20.6.1997 the Appellate Authority dismissed the appeal. The matter was carried in revision. The revision was also dismissed.

The Assistant Commissioner had assessed the sale of fryums for the subsequent period commencing from 1.4.1993 to 31.3.1994 also under the above residuary entry at 8% and demanded sales tax amounting to Rs.66,202.

Aggrieved by the aforestated decision in respect of the above two years the assessee moved the Madhya Pradesh High Court in Writ Petition under Articles 226/227 of the Constitution praying for a declaration that fryums be held as cooked food liable to tax under Entry IV of Part I of Schedule II of the 1958 Act corresponding to Entry 2 of Part I of Schedule II of the 1994 Act. After hearing both the parties the learned single Judge came to the conclusion that fryums are cooked food liable to be assessed under Entry 2 Part I of Schedule II to the 1994 Act.

Aggrieved by the decision of the learned single Judge the Department carried the matter in appeal to the Division Bench which has confirmed the decision of the learned single Judge.

We quote hereinbelow Section 2(g) of M.P. Commercial Tax Act, 1944 which defines the term cooked food "

"2(g) Cooked food includes sweets and sweetmeats, mishri, batasha, chironji, shrikhand, rabadi, doodhpak, prepared tea and prepared coffee but excludes ice-cream, kulfi, ice-candy, non-alcoholic drink containing ice-cream, cakes, pastries, biscuits, chocolates, toffees, lozenges, peppermint drops and mawa

We also quote hereinbelow item 2 of Part I of Schedule II to the said 1994 Act which levies the rate of tax at 4%.

SCHEDULE II

(Effective upto 31.12.1999)

S.No.Description of Good Rate of Tax

Part I

1. Unginned cotton4%

2. Cooked food 4%

We also quote hereinbelow the residuary entry namely

Item 1 of Part VII of Schedule II to the M.P. Commercial Tax

Act 1994 which fixes the rate of duty at 8% (earlier 6%):

"M.P. Commercial Tax Act, 1994

S.No.Description of Good Rate of Tax

Part VII

1.All other goods not included in Schedule I or any other part of this Schedule."

In the case of Commissioner of Sales Tax M.P., Indore v. Shri Ballabhdas Ishwardas, Bombay Bazar, Khandwa 1968 (21) STC 309, it has been held that the term cooked food cannot be read in a wider sense so as to include everything