Case Law Details
Saj Food Products Pvt. Ltd. Vs State of Meghalaya & ors (Meghalaya High Court)
What is apparent in this case is that the petitioner may be using the same raw material as in the manufacture of bread, whereupon the petitioner manufactures a form of bread and refines the same to rusk. The process has been explicitly described at page 9 of the petition as quoted above. Thus, it is plain to see that the petitioner manufactures bread and subjects such bread to a further process, which activity falls within the meaning of „manufacture‟ as used in the said Act for an altogether different product to be produced.
The scenario herein is the same as noticed in Vasantham Foundry. The final products were not cast iron but the cast iron produced by the assessee was subjected to a further process of manufacture to be converted into pipes or manhole covers or bends. Just as the Supreme Court held in Vasantham Foundry that cast iron casting could not be regarded as cast iron since the manufactured cast iron was subjected to a further process of manufacture to be converted into cast iron castings, in the present case, the same ingredients that go into the manufacture of bread may, doubtless, be used by the petitioner but upon bread being manufactured by the petitioner, the petitioner subjects such bread to a further process of manufacturing activity to arrive at its finished product of rusk. Quite obviously, some value is added to bread to make it into rusk and that would attract VAT.
As a consequence, it cannot be said that the petitioner‟s product rusk is bread or the VAT exemption available to bread in the State must be extended to rusk. Several of the Supreme Court judgments placed also applied a common parlance test. Upon applying the common parlance test in this case, the question that arises is whether a person desirous of buying bread would ask for rusk or whether a person who goes to a shop and asks for rusk would be given bread in its place. The answer is obvious: bread is bread and rusk is rusk and never may the twain be equated. Accordingly, there is no flaw found in the appellate judgment and order under revision and no ground seen for interfering therewith.
FULL TEXT OF THE JUDGMENT/ORDER OF MEGHALAYA HIGH COURT
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Both the Single Bench and Division Bench of Chattisgarh High Court pronounced that Rusk is dry form of bread and hence exempted from VAT like bread.