Case Title: M/s Devyani International Limited Versus The Additional Commissioner
Case No.: S.B. Sales Tax Revision / Reference No. 58/2013
Decided on: 05/05/2023
Coram: HON’BLE MR. JUSTICE SAMEER JAIN
Facts of the case:
The present bunch of Sales Tax Revisions / References (for short “STRs”) were admitted on following question(s) of law:
In STR No. 58/2013:
“Whether ‘Pizza’ falls within the notification dated 09.03.2010 and is entitled for exemption of payment of VAT in excess of 5% thereupon”
In STR Nos. 91/2016, 92/2016, and 93/2016:
(i) Whether sandwich is a cooked food as per notification dated 09.03.2010?
(ii) Whether in the facts and circumstances of the case and the proper interpretation of the term branded bakery product and the provisions of law, the Ld. Rajasthan tax Board is justified in holding that the sale of sandwich as a branded bakery product?
(iii) Whether the subsequent legislature amending the notification and the rate schedule can be used for interpretation of the earlier provisions of law?
The lis in question pertains to classification of ‘pizza’ and ‘sandwich’ under the Rajasthan Value Added Tax Act, 2003 (for short “RVAT”). The common issue for consideration of this Court is whether ‘pizza’ and ‘sandwich’ fall within the ambit of “cooked food” to claim benefit of exemption notification dated 09.03.2010? Since the issue involved is identical, STR No. 58/2013 is taken as lead file.
The petitioner-assessee submits that the learned Tax Board has erred in law and in fact by holding that ‘pizza’ and ‘sandwich’ are ‘baked branded products’ and not ‘food’. Learned counsels for the petitioner-assessee submits that there is no dispute with regard to the fact that the restaurants run by the petitioner-assessee are below 3 star category and that ‘pizza’ is prepared by the process of baking, which is one of the various process of cooking. It is submitted that ‘pizza’ is a compete food which provides valuable nutrients required by the human body viz. carbohydrates, fats, vitamin, proteins, minerals, etc. Similarly, sandwich is also prepared by cutting the bread loaf, which is also prepared in the restaurant, into half and then by adding either vegetable patty or non-vegetarian item like meat and chicken (the fillings), which are prepared by frying and heating. The sandwich also contains various fresh vegetables and sauces and is in itself a complete meal having high nutritional value and nourishment, which is cooked by the petitioner assessee and sold to various customers.
Judgement:
The department contended that the goods sold by the assessee do not fall within the ambit of ‘cooked foods’ and are rather in the nature of ‘branded baked products’ and therefore the petitioner-assessee cannot get the benefit of the exemption notification. As per common parlance, in India and more particularly in the State of Rajasthan, ‘pizza’ and ‘sandwich’ are not understood as ‘cooked food’
The Jaipur Bench of the Rajasthan High Court has held that the sale of ‘pizza’ and ‘sandwich’ would qualify as the sale of ‘cooked food’ and the sale shall be eligible for the exemption of payment of Value Added Tax (VAT) in excess of 5%.
The Bench of Justice Sameer Jain has observed that the term ‘cooked food’ is confined to those cooked things that one generally takes at regular meal. However, with the advent of time and changes in societal eating norms, the reasoning of the Tax Board that ‘pizza’ or ‘sandwich’ cannot be considered ‘meals’ does not entirely hold true. In any case, since the finding of the Tax Board is not based on cogent evidence, it cannot be sustained.
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Written by: Mahima Saini
