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M.P. Menon, V.P. Gopalan Nambiar, JJ.
CITY COLD STORAGE
Versus
STATE OF KERALA
W.A. Nos. 107 and 336 of 1976, T.R.C. Nos. 39, 40 and 41 of 1978 and O.P. Nos. 2185 of 1974, 3892 and 6035 of 1975, 2006 and 5087 of 1976-E and 4039 of 1977-L
Decided On: Decided On : 20-02-1979
frozen meat - interpretation of exemption notification under Kerala General Sales Tax Act, 1963 - SCHEDULE I - 23. Fresh fish. 25. Meat except meat which is cured or frozen. - The court discussed the meaning of 'frozen meat' and 'fresh fish' in the context of an exemption notification issued under section 10 of the Kerala General Sales Tax Act, 1963. The court considered the commercial understanding of the terms and concluded that 'frozen meat' refers to meat frozen at very low temperatures, much below the freezing point of water, and not merely kept in a refrigerator or cold storage. The court also held that 'fresh fish' includes fish not stale, musty, or vapid, and that fish kept in a refrigerator is exempt from tax as 'fresh fish'. The court relied on various treatises and authorities to interpret the concepts of freezing and cold storage in the context of meat and fish preservation. The court allowed the tax revision cases and reversed the order of the Tribunal, holding that the turnover from meat kept in a refrigerator or cold storage is not 'frozen meat' and is not assessable to tax. The court also dismissed the State's appeal and held that the turnover from fish kept in a refrigerator is exempt from tax as 'fresh fish' under the notification.
Fact of the Case:
The case involved tax revision cases and writ petitions challenging the interpretation of the expressions 'frozen meat' and 'fresh fish' in an exemption notification issued under section 10 of the Kerala General Sales Tax Act, 1963. The main issue was whether meat stored in a cooler or refrigerator qualified for exemption under the notification as 'frozen meat' and whether fish kept in cold storage qualified as 'fresh fish'. The Sales Tax Appellate Tribunal held that the meat in question was frozen meat and fell outside the exemption, leading to the filing of tax revision cases by the aggrieved assessee. The court also considered writ petitions challenging provisional assessments for turnover from frozen meat and fish kept in cold storage.
Finding of the Court:
The court found that 'frozen meat' refers to meat frozen at very low temperatures, much below the freezing point of water, and not merely kept in a refrigerator or cold storage. The court also held that 'fresh fish' includes fish not stale, musty, or vapid, and that fish kept in a refrigerator is exempt from tax as 'fresh fish'. The court allowed the tax revision cases, reversed the order of the Tribunal, and dismissed the State's appeal. The court also dismissed the writ petitions challenging provisional assessments, as the final assessments were pending and the questions raised were deemed hypothetical and academic at that stage.
Issues: The main issues were the interpretation of the terms 'frozen meat' and 'fresh fish' in an exemption notification under the Kerala General Sales Tax Act, 1963, and whether meat stored in a cooler or refrigerator qualified for exemption as 'frozen meat' and whether fish kept in cold storage qualified as 'fresh fish'. The court also addressed the pending final assessments and the hypothetical and academic nature of the questions raised in the writ petitions.
Ratio Decidendi: The court held that the commercial understanding of the terms 'frozen meat' and 'fresh fish' should be considered in interpreting the exemption notification. It concluded that 'frozen meat' refers to meat frozen at very low temperatures, much below the freezing point of water, and not merely kept in a refrigerator or cold storage. The court also held that 'fresh fish' includes fish not stale, musty, or vapid, and that fish kept in a refrigerator is exempt from tax as 'fresh fish'. The court relied on various treatises and authorities to interpret the concepts of freezing and cold storage in the context of meat and fish preservation.
Final Decision: The court allowed the tax revision cases, reversed the order of the Tribunal, and dismissed the State's appeal. The court also dismissed the writ petitions challenging provisional assessments, as the final assessments were pending and the questions raised were deemed hypothetical and academic at that stage.
GOPALAN NAMBIYAR, C.J.
These appeals, tax revisions and the writ petitions raise an interesting question regarding the meaning of the expressions "frozen meat" and "fresh fish" occurring in an exemption notification issued under section 10 of the Kerala General Sales Tax Act, 1963. We quote the said notification and the two relevant entries in the First Schedule thereto :
"S.R.O. No. 342/63. - In exercise of the powers conferred by section 10 of the Kerala General Sales Tax Act, 1963 (Act 15 of 1963), the Government of Kerala having considered it necessary in the public interest so to do hereby make an exemption in respect of the tax payable under the said Act on the sale or purchase of the goods specified in Schedule I hereto appended and by persons specified in Schedule II hereto appended in regard to their turnover on the sales of goods specified therein subject to the conditions specified therein."
SCHEDULE I
"23. Fresh fish.
25. Meat except meat which is cured or frozen."
With respect to these entries extracted above, the question which arises for consideration in what is the meaning to be attributed to the terms "fresh fish" and "frozen meat". We may notice the facts with respect to T.R.C. Nos. 39 to 41 of 1978 in which the main arguments were advanced.
T.R.C. Nos. 39 to 41 of 1978
The assessment years involved in these cases are 1968-69 to 1970-71 (both inclusive). The assessee was a dealer, among other things, of meat stored in its cooler or refrigerator. The question was whether it was entitled to exemption under entry 25 of the notification quoted supra or was outside the scope of the said entry by reason of the meat being frozen meat which is excepted from the scope of the exemption. The Sales Tax Appellate Tribunal held that the meat in question was frozen meat and therefore fell outside the exemption. The aggrieved assessee has filed these tax revision cases.
2. The principle of construction to be adopted in such cases is, we should think, well-settled. The test should be : How is the commodity, "frozen meat", understood by the world of trade and commerce; what is the meaning attributed to the expression "frozen meat" in the commercial sense ? As authority for the proposition that this should be the correct guideline in deciding the meaning of the term, we think, it would be enough to notice the decision of a Full Bench of this Court in Krishna Iyer v. State of Kerala ([1962] 13 S.T.C. 838 (F.B.).), which has surveyed exhaustively the relevant decisions on the point. The question there arose whether "green ginger" is a vegetable or not. Dealing with the question, the Full Bench observed :
"7. But it is not the dictionary meaning of the term that will invariably prevail in the construction of a statute. The rule of interpretation applicable to such cases is well-recognised. It is the rule that particular words used by the legislature in the denomination of article should be understood according to the common commercial understanding of the term used and not in their scientific or technical sense, for, as stated in 9 Wheaten U.S. 435, the legislature does not suppose our merchants to be naturalists, or geologists, or botanists. In 1951 Canada Law Reports (Exchequer Court) 122 the question as to whether salted peanuts and cashew-nuts fell within the category of 'fruit' or 'vegetable' for the purpose of the Excise Act, Ch. 179, R.S.C. 1927, came up for consideration and the question was answered in the negative in spite of the evidence of the botanists that both the peanut and the cashew-nut are vegetables in the wider meaning of that word, that each is a fruit and that neither is a nut. The court said :
'Counsel for the plaintiff suggested a test which I think apposite. Would a householder when asked to bring home fruit or vegetable for the evening meal bring home salted peanuts, cashew-nuts or nuts of any sort ? The answer is obviously "No".'
8. In Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, Akol
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