The Bombay High Court applied the common parlance test to clarify that the pineapple slices or fruit cocktail preserved in sugar syrup and canned in sealed vacuum containers would not qualify to be categorised as ‘fresh fruit’. In the present case, the Court pointed out that it is not considering an entry that merely describes the product as ‘fruit’. Rather, the question for determination is of the ‘entry’ which describes the goods as ‘fresh fruit’.
The Division Bench comprising Justice Advait M. Sethna and Justice M.S. Sonak observed that the legislature’s choice of the word ‘fresh’ must not be ignored or made meaningless. The word ‘fresh’ acts as a limitation. If the legislative intention was to include all types of fruits in every form, such as fresh, canned, preserved, and so on, under a single entry, then perhaps the Legislature would have used the term ‘fruits’.
However, the inclusion of ‘fresh’ clearly shows an intention to exclude fruits that are not in their natural state, such as dried, frozen, canned, or preserved foods, added the Bench.
Accordingly, the Bench concluded that the goods like pineapple slices, fruit cocktail preserved in a sugar syrup and canned in vacuum sealed containers are not ‘fresh fruits’ covered by the scope of Entry A-23 in the Schedule of the Bombay Sales Tax Act and consequently liable to be taxed.
Briefly, the respondent, engaged in the manufacture and sale of juices, instant soft drinks, compounds, powders, essences, etc., was granted exemption under the 1979 Scheme of Incentives in relation to the payment of sales tax for the manufacture of certain products. However, in the assessment for the period 1991-1992, exemption benefits were disallowed in the context of items like tomato juice, mixed fruit jam, pineapple slices, sweet corns, etc., because these products were not explicitly mentioned in the eligibility certificate as the class of goods/products manufactured by the unit eligible for exemption benefits.
This led to a dispute as to whether the goods, like pineapple slices, pineapple tidbits, fruit cocktail preserved in sugar syrup and canned in vacuum-sealed tin containers, could be classified as ‘fresh fruits’ covered by the scope of Entry A-23 (as it then stood) of the Bombay Sales Tax Act for levy of nil tax or claim of exemption. The Maharashtra Sales Tax Tribunal has opined that the case in question could be classified as ‘fresh fruit’ for Entry A-23.
Appearances:
AGP Amar Mishra, for the State/ Revenue
NA, for the Respondent/ Taxpayer
