Holding

Biscuit cannot be treated as 'cooked food' for the purpose of the notification, so the reduced tax rate does not apply.

Summary

Annapurna Biscuit Manufacturing Co., a biscuit maker, claimed that under a 1971 Uttar Pradesh Sales Tax notification biscuits fell within the definition of "cooked food" and should be taxed at the reduced 2% rate. The assessing authority rejected this, treating biscuits as an unclassified commodity taxed at 3.5%, and the decision was upheld by the Deputy Commissioner, the Judge (Appeal) Sales Tax, and the Allahabad High Court. On special leave, the Supreme Court examined whether the term "cooked food" in the notification, whose Hindi equivalent is "pakaya hua bhojan," includes biscuits. Relying on ordinary parlance in Uttar Pradesh and prior decisions, the Court held that biscuits are not ordinarily understood as cooked food. Consequently, the appeal was dismissed and the higher tax rate remained applicable.

Issues considered

Whether the expression 'cooked food' in the Uttar Pradesh Sales Tax notification includes biscuits.

Legislation cited

U.P. Sales Tax Act, 1948s. 3-A(2)

Subjects

sales taxcooked foodbiscuitstatutory interpretationtax ratenotificationU.P. Sales Tax Act

Judgment

149

ANNAPURNA BISCUIT A
)
MANUFACTURING CO., KANPUR
v.
COMMISSION~ R OF SALES TAX,
U.P., LUCKNOW
8
July 28, 1981

(R.S. PATHAK E.S. VENKATARAMIAH AND
V. BALAKRISHNA ERADI, JJ.J

U.P. Sales Tax Act, 1948 (Act XV of 1948) and Notification dated 6th C
OctoberJ 1971 issued under section J.A (2) of the Act providing for lower rate
of Sales Tax at 2% of the turnover on "Pakaya Hua Bhojan" (q'tfi'M garr
11)~)-Words and phrases-JVhether "biscuits" fall under "cooked food"
( 'l''Pl'!T g-air 11T"f'f)

Dismissing the appeal, the Court D
HELD: I. In the context and background of the notification "biscuit"
cannot be treated as "cooked food". In the Hindi text of the notification, issued
contemporaneously with the English version, the words (qcpp::rr ~T -+ft\ifOf)
were used as the equivalent for cooked food. Ordinarily biscuit is not under-
stood as "cooked food". Nor any one asking for some "cooked food" in a
hotel will be served with "biscuits" in Uttar Pradesh. The item has_ been cor- E
rectly treated as''undassified commodity" and tax levied accordingly. [151F,G,H]

Commissioner of Sales Tax v. Jassu Ram Bakery Dealer, 38 S.T.C. 461;
Commissioner of Sales Tax i\fadhya Pradesh v. Shri Bailabhdas lswardas,
21 S.T.C. 309, approved.

2. It is a well settled rule of constru:::tion that the words used in a law F
imposing a tax should be construed in the same way in \Vhich they are under-
stood in ordinary parlance in the area in which the law is in force. If an
expression is capable of a wider meaning as w.:11 as narrower meaning the
question whether the wider or the narrower meaning should be given depends
on the context and the background of the case. [151 C-E]

Hinde v. Alln1ond, 87 L.J. K.B. 893, quoted with approval. G
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3133
of 1979

Appeal by special leave from the judgment and order dated the H
30th July, 1979 of the Allahabad High Court in Sales Tax Revision
No. 573 of l 979.
150 SUPREME COURT REPORTS [1982] I S.C.R.

G.L. Sanghi, Bharat Ji Aggarwal, Naresh Kumar Sharma and
Vineet Kumar for the appellant.
'
S.C. Manchanda and Mrs. Sobha Dixit for the respondent.

The Judgment of the Court was delivered by
B
VENKATARAMIAH, J. The short point for consideration in this
appeal is whether the expression 'cooked food' used in certain
notifications issued under the U.P. Sales Tax Act, 1948 (U.P. Act
XV of 1948) (hereinafter referred to as 'the Act') can be construed
G as including within its meaning 'biscuits' also.

The assessee, the appellant herein, is a registered firm engaged 1
in the business of manufacture and sale of biscuits intended for
human consumption. The assessee is a registered dealer under the
Act. During the assessment proceedings under the Act for the year
D 1972-73 the assessee claimed that the turn-over relating to biscuits
manufactured and sold by it amounting to Rs. 35,09,920.38 P. was
liable to be taxed at two per cent which was the rate prescribed by
a notification issued by the State Government for cooked food
contending that 'cooked food' :.included 'biscuits' also. The noti·
fication relied on was one issued on October 6, 1971 under sub·
E section (2) of section 3-A of the Act in supersession of an earlier
notification dated July 1, 1969. In both the notifications the tax
was fixed at two per cent of the turn-over payable at all points of
sale in the case of cooked food. The Assistant Commissioner (Tax
Assessment) Sales Tax, Kanpur who was the assessing authority
rejected the contention of the assessee that cooked food included
F biscuits also and imposed tax at the rate of three and a half per cent
on the turn·over relating to biscuits treating the same ai an unclassi-
fied commodity. An appeal filed against the order of the assessing
authority before the Deputy Commissioner Sales Tax and a further
appeal before the Judge (Appeal) Sales Tax, Lucknow were
unsuccessful. The High Court of Allahabad also declined to inter·
G fere with the said order. This appeal by special leave is filed against
the order of the High Court under Article 136 of the Constitution.

The only ground urged before us is that biscuits should have
been treated by the authorities under the Act and by the High Court
H as cooked food and sales tax should have been levied on the turn-
over of biscuits at the rate prescribed in respect of cooked food
under the notification referred to above. The argument urged on
'

ANNAPURNA BISCUIT v. C.S.T. (Venkataramiah, J.) 151
behalf of the appellant is that biscuit which was consumed by human A
I being for nourishment is food and since it is prepared by baking
which is a kind of cooking process it should . be treated as cooked
food. Relying on some foreign English dictionaries it is contended
that cooking means preparation of food by application of heat as
by boiling, baking, roasting, broiling etc. and biscuit should therefore
be treated as cooked food. What is of significance in this case is B
that the Hindi version of the notification issued uses the expression
'l"f;Tl!T g'IT ~'f (pakaya hua bhojan) for 'cooked food' found in the
notification in English language. •
It is a well settled rule of construction that the words used in

- a Jaw imposing a tax should be construed in the same way in which
they are understood in ordinary parlance in the area in which the
law is in force. If an expression is capable of a wider meaning
c
as well as narrower meaning the question whether the
wider or the narrower meaning should be given depends on the
context and the background of the case. In Hinde v. Allmond(')
the question was whether tea was an "article of food" within the
meaning of an Order designed to prohibit the hoarding of food D
namely Food Hoarding Order of 1917. The learned judges held it
was not even though in some other decisions it had been held to be
an "article of food". Shearman, J. one of the judges said that he rested
his judgment on the common sense interpretation of the word 'food' in
the Order, apart from its meaning in any other stature'. It is interesting
to note that in a case before the Allahabad High Court in Annapurna E
Biscuit Manufacturing Co. v. State of U.P. (2) the assessee had con-
tended that biscuit was an article of confectionery and that contention
was negatived. It is relevant to note, as we have mentioned earlier,
that when the Hindi text of the notification was issued contempora-
neously with :the English version, the words 'l'fPH ifl1T '1T'R
('pakaya hua bhojan') were used as the equivalent of the words F
'cooked food'.
It may be that biscuit is served at tea time and in its wider
meaning 'cooked food' may include biscuit. But ordinarily biscuit
is not understood as cooked food. If a person goes to a hotel or
restaurant and asks for some cooked food or 'l'fiT!TT g-m <rm G
('pakaya hua bhojan') certainly he will not be served with biscuits
in Uttar Pradesh. While it is not necessary to state in the present
case as to what all items may be called as cooked food, we can
definitely say that in the context and background of the notification
biscuit cannot be treated as cooked food.
ff
(1) 87 L.J.K.B. 893.
(2) 35 S.T.C. 127.
,

152 SUPREME COURT REPORTS (1982) I S.C.R.

A The High Court of Allahabad has in an earlier case in
Commissioner of Sales Tax v. Jassu Ram Bakery Dealer(1) held that
biscuit was not cooked food. The High Court of Madhya Pradesh
has also taken the same view in Commissioner of Sales Tax Madhya
Pradesh v. Shri Ballabhdas /swardas.( 2 ) We approve of the views
expressed in the aforesaid decisions.
B
There is no ground to interfere with the orders under appeal.
In the result, this appeal fails and is dismissed. No costs.

S.R. Appeal dismissed.
-

ii l 38 STC 461,
(2) 21 STC 309.