Bombay Sales Tax Act | High Court Says Canned Pineapple Slices Cannot Be Classified As 'Fresh Fruits', Denies Tax Exemption
In a significant ruling on product classification under the Bombay Sales Tax Act, 1959, the Bombay High Court has held that canned pineapple slices, pineapple tidbits and fruit cocktail preserved in sugar syrup cannot be treated as “fresh fruits” for the purpose of Entry A-23 of the Schedule to the Act. A Division Bench of Justice M.S. Sonak and Justice Advait M. Sethna answered...
In a significant ruling on product classification under the Bombay Sales Tax Act, 1959, the Bombay High Court has held that canned pineapple slices, pineapple tidbits and fruit cocktail preserved in sugar syrup cannot be treated as “fresh fruits” for the purpose of Entry A-23 of the Schedule to the Act.
A Division Bench of Justice M.S. Sonak and Justice Advait M. Sethna answered the sales tax reference in favour of the Revenue and against the assessee Sudha Instant Soft Drinks & Essences, Nagpur, thereby overturning the Maharashtra Sales Tax Tribunal's view.
The case in hand related to the issue whether canned fruits such as pineapple slices, pineapple tidbits and fruit cocktail preserved in sugar syrup and packed in sealed containers can be treated as “fresh fruits” under Entry A-23, thereby attracting NIL tax?
The Tribunal had earlier held that such canned products fall within the meaning of “fresh fruits” and therefore qualify for tax exemption.
Assailing the order, the Department filed Sales Tax Reference before the High Court.
The Bench emphasized that when taxing statutes do not define a term, its meaning in common trade and everyday use must be applied, rather than scientific or technical meanings.
Relying on its earlier decision in The Commissioner of Sales Tax, Maharashtra State, Mumbai Vs. M/s Nestle India Ltd. (STR No. 24/2010) and the Supreme Court's rulings in P.A. Thillai Chidambara Nadar Vs. Addl. Appellate Asstt. Commissioner, Madurai and another (1985) 4SCC 30, CST v. Jaswant Singh Charan Singh , AIR 1967 SC 1454 reiterating common parlance in interpretaing the tax enteries for tax exemption.
The High Court stated that:
Applying the common parlance test, it is difficult to hold that the pineapple slices or tidbits or fruit cocktail preserved in sugar syrup and canned in sealed vacuum containers would qualify to be categorised as 'fresh fruit'. Going by the test adopted in the case of His Majesty the King Vs. Planters Nut and Chocolate Company Limited, which decision was approved by the Hon'ble Supreme Court in CST v. Jaswant Singh Charan Singh, AIR 1967 SC 1454 and followed in P.A. Thillai Chidambara Nadar (supra), the question to be posed would be whether a householder when asked to bring home some 'fresh fruit' from the market, would bring home pineapple slices or a fruit cocktail preserved in sugar syrup canned and sealed in vacuum containers? If the answer is in the negative, as, by applying the common parlance test, we think it should be, then the view taken by the Tribunal based upon failing to appreciate certain observations in Pio Food Packers (supra) would warrant interference.
The Court also observed that if the legislative intention as to include all types of fruits in every form- such as fresh, canned, preserved, and so on- under a single entry, then perhaps the Legislature would have used the term 'fruits'. However, the inclusion of 'fresh' clarly shows an intention to exclude fruits that are not in their natural state, such as dried, frozen, canned or preserved foods.
In view of the above, the Bench answered the Reference in favour of the Revenue and against the Assessee, holding that canned pineapple slices, tidbits and fruit cocktail are not 'fresh fruits' under Entry A-23.
Case Title: The Commissioner of Sales Tax, Mumbai Vs. Sudha Instant Soft Drinks and Essences, Nagpur
Case No: Sales Tax Reference No. 3 of 2010 in Reference Application No. 68 of 2004
Appearance for Applicant: AGP for State