STATE OF GUJARAT Vs. GOKALDAS TRADING COMPANY

JUDGEMENT

(1.) The Sales-tax Tribunal has made this reference at the instance of the State of Gujarat under Section 69 (1) of the Gujarat Sales-tax Act, 1969. It has referred to us the following question for our decision: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the opponent's disputed sale of Cadbury's Bournvita was not a sale covered by the expression "foodstuff and food provisions of all kinds" as used in Entry 6 of Schedule III to the Gujarat Sales-tax Act, 1969 but was covered by the residuary Entry 13 of Schedule III to the Act ?"

(2.) M/s Gokaldas Trading Co., (hereinafter referred to as "the opponent") is a dealar registered under the Act. It wanted to know the rate of tax payable on the sales of an article sold in the market under the trade-name of Bournvita. Therefore, it made an application under Section 62 of the Act to the Commissioner of Sales-tax to determine the rate at which such sales were liable to tax. The application was heard by the Deputy Commissioner of Sales-tax (Inspection). He held that Bournvita being foodstuff, sales of it would be covered by Entry 6 of Schedule III to the Act and taxable accordingly.

(3.) Against this decision, the opponent filed an appeal before the Gujarat Sales-tax Tribunal. Before the Tribunal, it was contended on behalf of the opponent that in common parlance Bournvita is not understood as food and it is normally taken by or advised for convalescing patients, nursing and expectant mother and invalid and elderly persons as energy supplying drink. It was also submitted that the words "foodstuff and food provisions" are used in a restrictive sense and held by this Court in State of Gujarat v. Sarabhai Chemicals (1971) 27 STC 170, and applying the test laid down in that case, it cannot be regarded as foodstuff or food provision. On the other hand, it was contended on behalf of the State that the manufacturers of Bournvita themselves have advertised their product as valuable food for invalid and elderly persons, and if the ingredients of Bournvita are taken into account, then it can certainly be regarded as an article of food falling within Entry 6 of Schedule III to the Act.