Holding

Fryums are not "cooked food" under Section 2(g) and therefore fall under the residual entry "all other goods not included in any part of Schedule I".

Summary

The assessee, T.T.K. Health Care Ltd, sold packaged "fryums" and claimed they fell under Entry 2, Part I of Schedule II of the Madhya Pradesh Commercial Tax Act, 1994, which defines "cooked food" and attracts a 4% tax. The Commercial Tax Department argued that fryums required further frying and were not directly consumable, thus should be taxed under the residual entry of Part VII at 8%. The High Court held fryums to be "cooked food" and allowed the lower tax, but the Department appealed. The Supreme Court examined the definition of "cooked food" in Section 2(g), noting the use of "includes" makes the definition enumerative, not exhaustive, and that only consumables are intended to be covered. Since fryums are semi‑cooked items that need additional frying and preservatives before consumption, they do not qualify as "cooked food". Consequently, the Court held they fall under the residual entry and allowed the appeal, imposing the higher tax rate.

Issues considered

Whether "fryums" qualify as "cooked food" within the meaning of Section 2(g) of the Madhya Pradesh Commercial Tax Act, 1994.
Whether the term "cooked food" is to be interpreted as an inclusive (enumerative) definition or a broader category.
Appropriate tax classification of fryums under Schedule II – Entry 2 Part I or the residual entry of Part VII.

Subjects

cooked foodstatutory interpretationinclusive definitioncommercial taxtax classificationfryumsschedule IIresidual entrytax rate

Judgment

COMMISSIONER OF COMMERCIAL TAX, INDORE AND ORS. A
v.
T.T.K. HEALTH CARE LTD.

APRIL 11, 2007

[S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ.] B

MP. Commercial Tax Act, 1994-s.2(g)-Schedule 11-Part I, Entry 2
and Part VJJ, Entry /- 'Fryums '-Not 'cooked food' within meaning of s.2(g)
as it is not directly consumable and requires further process of frying and C
addition of preservatives to make it consumable-Consequently cannot be
classified under Entry 2, Part I of Schedule JI.

Interpretation of Statutes-Inclusive definition-Legislative intent-
Held: ls to make definition enumerative and not exhaustive.
D
Words and Phrases-Term "cookedfood"-Meaning of-In the context
of s.2(g) of the MP. Commercial Tax Act, 1994.

The question which arose for consideration in the present appeal is
whether the 'fryums' made by assessee-respondent fall under Entry 2, Part I,
Schedule II which refers to 'cooked food' or under the residual entry in Part E
VII, Schedule II of the of the M.P. Commercial Tax Act, 1994.

Allowing the appeal, the Court

HELD: 1.1. Section 2(g) of the M.P. Commercial Tax Act, 1994 defines
the term 'cooked food'. It includes sweets, batasha, mishri, shrikhand, rabari, p
-I
doodhpak, tea and coffee but excludes ice-cream, kulfi, ice-candy, cakes,
pastries, biscuits, chocolates, toffees, lozenges and mawa. The item 'cooked
food' is inclusive definition which indicates. by illustration what the
Jegislatures intended to mean when it has used the term 'cooked food'. Reading
of the above inclusive part of the definition shows that only consumables are
sought to be included in the term 'cooked food'. In the case of 'fryums' there G
is no dispute that the dough/base is a semi-food. There is also no doubt that
in the case of 'fryums' a further cooking process was required. The 'fryums'
came in plastic bags. These 'fryums' were required to be fried depending on
the taste of the consumer. In the circumstances 'fryums' were like seviyan.
I H
2 SUPREME COURT REPORTS [2007] 5 S.C.R.

A 'Fryums' were required to be fried in edible oil. That oil had to be heated. I -
There was certain process required to be applied before 'fryums' become
consumable. In these circumstances the item 'fryums' will not fall within the
term 'cooked food' under Item 2 Part I of Schedule II to the 1994 Act It will
fall under the residuary item "all other goods not included in any part of
B Schedule I". [Para 12) [5-D-G]

1.2. When the word 'includes' is used in the definition, as is the case
under Section 2(g) of the 1994 Act, the legislature does not intend to restrict
1.
the definition; it makes the definition enumerative and not exhaustive, that is
to say, the term defined will retain its ordinary meaning but its scope would
C be extended to bring within the term certain matters which in its ordinary
meaning may or may not comprise. The term 'cooked food' in Section 2(g) of
the 1994 Act uses the word 'includes' in the definition. The said term 'cooked
food' makes the definition enumerative when it includes within the said term
sweets, batasha, mishri, shrikhand, doodpat, tea and coffee. When it
enumerates items like sweets, mishri, batasha, dhoodpak, tea and coffee the
D enumerated items help to probe into the legislative intent The legislative intent
under Section 2(g) is to include consumables. 'Fryums' at the relevant time
were not directly consumable. They were under-cooked items. They were semi-
cooked items. They required further process of frying and addition of
preservatives to make them consumables even after the specified time. But
E for the preservatives the items would have become stale.
[Para 13) [5-H; 6-A-C)

Bharat Co-operative Bank (Mumbai) Ltd. v. Co-operative Bank
Employees Union, (2007) 5 SCALE 57, relied on.

F Commissioner ofSales Tax MP., Indore v. Shri Ballabhdas Ishwardas,
Bombay Bazar, Khandwa, (1968) 21STC309 and Commissioner of Sales Tax, ,_
MP. v. India Coffee Workers Co-operative Society Ltd., Jabalpur, (1970) 25
STC 43, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 309 of2002.
G
From the Judgment and Order dated 01.03.200 I of the High Court of
Madhya Pradesh, Bench at Indore in LPA No. 40 of 200 I.

Dr. N.M. Ghatate, C.D. Singh, Mer:isagar Samantaray and Vairagya
Vardhan for the Appellants.
H
COMMNR. Of COMMERCIAL TAX, INDORE v. T.TK HEAL TH CARE LTD. (KAPADIA, l.]
3

-\ Gautam Narayan, Amit Gupta, Ankit Singhal and Nikhil Nayyar for the A
Respondent.

The Judgment of the Court was delivered by

KAPADIA, J. I. This civil appeal by grant of special leave petition
concerns classification dispute. According to the assessee 'fryums' fall under B
item No.2 of Part I of Schedule II which refers to 'cooked food' and in which
case the rate of tax is 4%. On the other hand, according to the Department
\ the item 'fryums' falls under Part VII of Schedule II to the M.P. Commercial
Tax Act, 1994, under which the rate of tax is 8% (earlier it was 6%)

2. The short question, therefore, which arises for determination in this c
civil appeal is the meaning of the term 'cooked food' in M.P. Commercial Tax
Act, 1994. Though the expression 'cooked food' has been defined under
Section 2(g) of the said 1994 Act in this civil appeal we are concerned with
the Assessment Years 1992-93 and 1993-94. It is made clear that the assessee
is a registered dealer under M.P. General Sales Tax Act 1958 and thereafter D
under M.P. Commercial Tax Act, 1994. It is not in dispute that the assessee
has been assessed under the above entries of the 1994 Act. This is because
the 1958 Act stood replaced by the 1994 Act and the original assessment
made under the 1958 Act have been treated to have been made under the 1994
Act.
E
3. On 12th March, 1996 the Assistant Commissioner, Indore, assessed
sale of 'fryums' at 8% sales tax under the residuary entry referred to above.
He demanded tax of Rs.1.33 lakhs (rounded oft) for the Assessment Years
1.4.92 to 31.3.93. The Commissioner of Commercial Tax, in an application made
under Section 68 of the 1994 Act held that 'fryums' were neither Namkeen nor
'cooked food' nor 'papad' nor 'cereals', and therefore, they were taxable
F
under the above residual entry of Part VII of Schedule II of the 1994 Act. On
20.6.1997 the Appellate Authority dismissed the appeal. The matter was carried
in revision. The revision was also dismissed.

4. The Assistant Commissioner had assessed the sale of 'fryums' for the
G
subsequent period commencing from 1.4.1993 to 3 J.3.1994 also under the
) above residuary entry at 8% and demanded sales tax amounting to Rs.66,202.

5. Aggrieved by the aforestated decision in respect of the above two
years the assessee moved the Madhya Pradesh High Court in Writ Petition
under Articles 226/227 of the Constitution praying for a declaration that H
4 SUPREME COURT REPORTS [2007] 5 S.C.R.

A 'fryums' be held as 'cooked food' liable to tax under Entry IV of Part I of
I -
Schedule II of the 1958 Act corresponding to Entry 2 of Part I of Schedule
II of the 1994 Act. After hearing both the parties the learned single Judge
came to the conclusion that 'fryums' are 'cooked food' liable to be assessed
under Entry 2 Part I of Schedule II to the 1994 Act.

B 6. Aggrieved by the decision of the learned single Judge the Department
carried the matter in appeal to the Division Bench which has confirmed the
decision of the learned single Judge.
/
7. We quote hereinbelow Section 2(g) ofM.P. Commercial Tax Act, 1944
which defines the term 'cooked food'
c
"2(g) 'Cooked food' includes sweets and sweetmeats, mishri, batasha,
chironji, shrikhand, rabadi, doodhpak, prepared tea and prepared coffee
but excludes ice-cream, kulfi, ice-candy, non-alcoholic drink containing
ice-cream, cakes, pastries, biscuits, chocolates, toffees, lozenges,
peppermint drops and mawa'
D
8. We also quote hereinbelow item 2 of Part I of Schedule II to the said
1994 Act which levies the rate of tax at 4%.
SCHEDULE II
(Effective upto 31.12.1999)
E S.No. Description of Good Rate of Tax

Part I

1. Unginned cotton 4%

F 2 'Cooked food' 4%
f-

9. We also quote hereinbelow the residuary entry namely Item I of Part
VII of Schedule II to the M.P. Commercial Tax Act 1994 which fixes the rate
of duty at 8% (earlier 6%):

G "M.P. Commercial Tax Act, 1994

S.No. Description of Good Rate of Tax (

Part VII

H 1. All other goods not included in Schedule I or any other part of
COMMNR. OF COMMERCIAL TAX, INDORE v. T.T K. HEALTH CARE LTD (KAPADIA,!.] 5
this Schedule." A
-\
10. In the case of Commissioner of Sales Tax MP., Indore v. Shri
Ballabhdas !shwardas, Bombay Bazar, Khandwa, (1968) 21 STC 309, it has
been held that the tenn 'cooked food' cannot be read in a wider sense so as
to include everything made fit for eating by application of heat, boiling,
baking, roasting, grilling etc. The term is confined to these cooked items B
which one generally takes at regular meal hours.

11. In the case of Commissioner of Sales Tax, MP. v. India Coffee
> Workers Co-operative Society Ltd., Jabalpur, (1970) 25 STC 43 the High
Court has held that the tenn 'cooked food' excluded meals from description
of words under Item 9 of Schedule I read with Section I 0( I) of M.P. General c
Sales Tax Act, 1959. That, the tenn 'meal' was not defined under that Act, and
therefore, one has to understand that word in tenns of common parlance and
popular meaning. It was therefore, held that supply of items like ice-cream,
toast, fried eggs, vegetable and mutton cutlets did not constitute meals
though the said items were also eatables. D
12. In the present case we have quoted the definition of the tenn
'cooked food'. It is an inclusive definition. It includes sweets, batasha, mishri,
" shrikhand, rabari, doodhpak, tea and coffee but excludes ice-cream, kulfi, ice-
candy, cakes, pastries, biscuits, chocolates, toffees, lozenges and mawa. That
the item 'cooked food' is inclusive definition which indicates by illustration E
what the legislatures intended to mean when it has used the term 'cooked
food'. Reading of the above inclusive part of the definition shows that only
consumables are sought to be included in the tenn 'cooked food'. In the case
of 'fryums' there is no dispute that the dough/base is a semi-food. There is
also no doubt that in the case of 'fryums' a further cooking process was
required. It is not in dispute that the 'fryums' came in plastic bags. These
F
-i
'fryums' were required to be fried depending on the taste of the consumer.
In the circumstances we are of the view that 'fryums' were like seviyan .
'Fryums' were required to be fried in edible oil. That oil had to be heated.
There was certain process required to be applied before 'fryums' become
consumable. In these circumstances the item 'fryums' in the present case will G
not fall within the tenn 'cooked food' under Item 2 Part I of Schedule II to
~
the 1994 Act. It will fall under the residuary item "all other goods not included
I in any part of Schedule I".

13. In the case of Bharat Co-operative Bank (Mumbai) Ltd. v. Co-
H
6 SUPREME COURT REPORTS (2007] 5 S.C.R.

A operative Bank Employees Union, [2007] 5 SCALE 57, this Court has held
I -
that when the word 'includes' is used in the definition, as is the case under
Section 2(g) of the 1994 Act, the legislature does not intend to restrict the
definition; it makes the definition enumerative and not exhaustive, that is to
say, the term defined will retain its ordinary meaning but its scope would be
B extended to bring within the term certain matters which in its ordinary meaning r-
may or may not comprise. Applying t~e above test to the term 'cooked food'
in Section 2(g) of the 1994 Act we find that the said term uses the word
'includes' in the definition. The said term 'cooked food' makes the definition
enumerative when it includes within the said term sweets, batasha, mishri, 1..
shrikhand, doodpat, tea and coffee. When it enumerates items like sweets,
C mishri, batasha, dhoodpak, tea and coffee the enumerated items help us to
probe into the legislative intent. The legislative intent in the present case
under Section 2(g) is to include consumables. 'Fryums' in the present case
at the relevant time were not directly consumable. They were under-cooked
items. They were semi-cooked items. They required further process of frying
and addition of preservatives to make them consumables even after the
D specified time. But for the preservatives the items would have become stale.
14. For the above reasons we set aside the impugned judgment and
allow this civil appeal filed by the Department with no order as to costs.

B.B.B. Appeal allowed.

I-

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