COMMISSIONER OF SALES TAX Vs. MELROSE BISCUIT CO

JUDGEMENT

(1.) The dealer opposite-party deals in the manufacture and sale of bread, biscuits, "namkeens", etc. The dispute in these two revisions relates to the assessment years 1982-83 and 1983-84. The following common question of law has been raised by the Commissioner of Sales Tax in the above revisions: Whether, on the facts and in the circumstances of the case, the Sales Tax Tribunal was legally justified to dismiss the appeal of the Commissioner, Sales Tax, U.P. and partly allow the appeal of the assessee by holding that the salted preparation of maida termed as kachri by the assessee was covered by Notification No. ST-2-5788 dated September 7, 1981 and, therefore, exempt from tax though kachri has been held to be a preparation from rice by the honourable High Court in the case of Kasturi Lal & Sons v. Commissioner of Sales Tax 1987 UPTC 1298 whereas in the present case the impugned commodity was prepared out of maida which is altogether different commodity like potato chips ?

(2.) Heard the counsel for the parties and perused the record. In both these revisions the dispute is whether the commodity which is called "kachri" by the dealer-opposite party is, in fact, a "kachri" within the meaning of Notification No. 5788 dated September 7, 1981 and is liable to be exempted from the payment of sales tax or the commodity is a "namkeen" and is liable to be taxed as such.

(3.) The assessing authority has found that the "kachri" is ordinarily prepared from rice. Admittedly the commodity in question which has been called as "kachri" by the dealer-opposite party has been prepared out of maida. The said commodity is used after frying with oil in the frying pan. The argument of the assessee that the since the produce in question is used after frying in oil is, therefore, "kachri" has not been accepted by the assessing authority on the ground that it is preparation of maida. The tax was imposed treating it as unclassified item. The first appellate authority has held that the product in question is "namkeen" as it was treated as "namkeen" in the earlier assessment years and as such it cannot be treated as unclassified item and modified the assessment order accordingly. The Tribunal has held that generally the word "kachri" is used with respect to such eatable item which are eaten after frying and is crisp. Ordinarily "kachri" is made from rice but due to new advancement different kinds of kachries are being manufactured. Therefore product though prepared out of maida is kachri. It has also observed that in the registration application by way of amendment the dealer-opposite party has mentioned that he will manufacture kachri (namkeen) which means that registration was applied for kachri and not only for "namkeen". This order is under challenge in the revisions. At this stage it is relevant to have the wordings of the Notification No. 5788 dated September 7, 1981. In exercise of the powers under Clause (a) of Section 4 of the U.P. Sales Tax Act, 1948 (U.P. Act No. XV of 1948), the Governor is pleased to order that, with effect from September 7, 1981, no tax under the said Act shall be payable on the sale or purchase of the following goods: 1. Flowers, flower seeds, seedlings, plants and seeds of kakri, kheera, kharbooza and tarbooz. 2. Sewaiyan, bari, mungauri, papar and kachri.