COASTAL FOOD PACKERS COCHIN Vs. STATE OF KERALA

JUDGEMENT

(1.) THE questions of law raised for decision by this court in this tax revision case are the following : " (1) Whether, on the facts and in the circumstances of the case, the levy of purchase tax on 'prawns' under item 65a of Schedule I of the Kerala General Sales Tax Act is void and unconstitutional on the ground that it infringes the petitioner's fundamental right under articles 14, 19 and 301 of the Constitution of India. (2) Whether, on the facts and in the circumstances of the case, the exemption can be claimed on the purchase of canned shrimps since the commodity purchased was not prawns, mentioned in items 69 and 65a of the Kerala General Sales Tax Act, but should be treated as 'foodstuffs sold in sealed containers' mentioned in item 44 of the schedule. (3) Whether, on the facts and in the circumstances of the case, the canned prawns can be treated as foodstuff since it is cooked before it is filled in tins. (4) Whether, on the facts and in the circumstances of the case, the jurisdiction under the Kerala General Sales Tax Act extends to the levy of purchase tax on prawns at multi-point. (5) Whether, on the facts and in the circumstances of the case, the levy and collection of tax on the petitioner's purchase of prawns and canned shrimps is authorised by law. (6) Whether, on the facts and in the circumstances of the case, the petitioner's purchase of prawns is in the course of export and thereby the levy of tax on the petitioner's total turnover of purchase of prawns is exempt under article 286 (b) of the Constitution. (7) Whether, on the facts and in the circumstances of the case, the artificial apportionment of the turnover in the ratio of 5 : 7 for the purpose of levying tax at 2 per cent. and 5 per cent. respectively is legal or not, and whether it is based upon actuals and whether it is arbitrary and capricious. "

(2.) THE petitioner is a dealer in prawns. He had effected purchases of canned shrimps amounting to Rs. 90,931. 02 during the relevant year, viz. , 1967-68, from other dealers in prawns. THE petitioner claimed exemption on the above purchases contending that the commodity purchased is not prawns mentioned in item 65a of the First Schedule of the Kerala General Sales Tax Act, 1963, for short the Act, but is "foodstuffs sold in sealed containers" mentioned in item 43 of the First Schedule. THE petitioner contended that raw prawns undergo a series of processing before they are canned and they convert themselves into a different commodity and therefore are different from prawns mentioned in item 65a of the First Schedule. This contention was repelled by the assessing authority, the Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal, Trivandrum. Originally, the assessing authority had made an addition of 20 per cent. to the conceded turnover on the ground of a possible suppression. This was confirmed by the Appellate Assistant Commissioner. But the Tribunal did not find sufficient justification for this addition. No other point was raised before the Tribunal. THErefore, out of the questions enumerated above, the only question that needs consideration by us is, in which entry the commodity in question falls. THE other questions are outside the scope of section 41 of the Act.

(3.) THE Supreme Court had to consider the expression "foodstuff" in State of Bombay v. Virkumar Gulabchand Shah (A. I. R. 1952 S. C. 335), in another context. THEre the Supreme Court was considering the violation of clause 3 of the Spices (Forward Contracts Prohibition) Order, 1944, read with section 2 (a) of the Essential Supplies (Temporary Powers) Act, 1946, to find out whether turmeric can be included within the expression "foodstuff". We extract below paragraph 10 in the judgment to highlight the view that we take that in dealing with a case like this, the problem posed has to be viewed in relation to the context : " Much learned judicial though has been expended upon this problem - what is and what is not food and what is and what is not a foodstuff; and the only conclusion I can draw from a careful consideration of all the available material is that the term 'foodstuff' is ambiguous. In one sense, it has a narrow meaning and is limited to articles which are eaten as food for purposes of nutrition and nourishment and so would exclude condiments and spices such as yeast, salt, pepper, baking powder and turmeric. In a wider sense, it includes everything that goes into the preparation of food proper (as understood in the narrow sense) to make it more palatable and digestible. In my opinion, the problem posed cannot be answered in the abstract and must be viewed in relation to its background and context. . . . . . . . . . "