1983 PTD 117 (PLP)

NASIR ASLAM ZAHID,J.‑This judgment will dispose of Sales Tax case No. 98 of 1972 (assessment year 1963‑64) ; Sales Tax Case No. 97 of 1972 (assessment year 1964‑65) ; and Sales Tax Case No. 92 of 1972 (assessment year 1965‑66). The applicant in all these three cases is the Commissioner, Sales Tax (Central), Karachi, and the respondent/assessee is also the same, gamely, Pakistan Services' Limited. The Income‑tax Appellate Tribunal (Karachi Bench), Karachi, by their common order dated 20‑10‑.1971, allowed the appeals of the respondent/assessee and in these cases applications have been riled under the Sales Tax Act, 1951, for answering the following two common questions which arise out of the order dated 20‑10‑1971 of the Income‑tax Appellate Tribunal :‑ "(i) Whether on the facts and in the circumstances or the case, the Tri bunal was justified in holding the bakery products served in hotels and restaurants to be exempted within the meaning of food articles served in hotels and restaurants a: enumerated in Item No. 20 of Notification.' (ii) Whether on the facts and in the circumstances of the case, the Tribunal was justified in construing that the facts of removal of item No. 21 from the exemption list of the Notification No. 9 dated 27‑6-1951 did not have the effect of making bakery products taxable?"

2. The assessee/respondent runs the Hotel Inter‑Continental. For the assessment years in question, the Sales‑tax Officer held that bakery products manufactured and served in the hotel of the respondent did not qualify for exemption from payment of sales‑tax. Appeals on this point were preferred by the respondent/assessee before the Appellate Assistant Commissioner of Sales‑tax, who confirmed the orders of the Sales‑tax Officer in this regard. The respondent/assessee filed further appeals before the Income‑tax Appellate Tribunal, and as observed earlier, the Income‑tax Tribunal, by their order dated 20‑10‑1971, allowed the appeals, directing that exemption be granted from shies‑tax to bakery products of the respondent/assessee, which were manufactured and served by it in its hotel and restaurant. By Notification dated 27.6‑1951 the Central Government had exempted certain goods specified in the said Notification from tax payable under the Sales‑tax Act, 1951 and item No. 20 of the Notification dated 27‑6‑1951 was as follows :‑ "Food articles served in hotels and restaurants" Item No. 21 of the said Notification exempted products of bakeries as follows :‑ "

21. Products of bakeries excluding‑ (a) biscuits packed and sold in tins or cardboard or paper containers or cartons ; and (b) sweetmeats." The Income‑tax Tribunal reached the conclusion that bakery products manufactured and served by the assessee hotel were not excluded from the item "food article" and as such for the assessment years in question the respondent/assessee was entitled to exemption in respect of the bakery pro ducts manufactured and served is its hotel.

3. We have heard Mr. S. Haider Ali Pirzada, Advocate for the Applicant and Mr. Iqbal Naim Pasha, Advocate for the Respondent in these cases. The first contention of Mr. S. Haider Ali Pirzada was that the words "food articles" do not include bakery products, as according to him the word "food" signifies a meal, which would normally refer to the major meals, namely, breakfast, lunch and dinner. We are not impressed with this argument. Bakery products like pastries and biscuits are items of food and inn common, parlance also the words "food articles" would include bakery products. Learned counsel for the applicant has referred to the case of Annapurna Biscuit (Mfg.) Co. v, State of U. P. (1975 T L R (NOC) 3 (All.)), a decision of the Allahabad High Court, wherein it was held, while interpreting a Notification dated 15‑11‑1971, issued under the U. P. Sales‑tax Act of 1941 that "biscuits" were not included in the item "confectionery" Relying on A I R 1952 All. 460, the Allahabad High Court, in the said case, came to the conclusion that in common parlance and in trade circles a distinction is always drawn between biscuit and articles which are called confectionery. The facts of this case are clearly distinguishable from the point involved in the instant cases. The learned counsel for the applicant also referred to the case of State of West Bengal v. Washi Ahmed (1977 T L R 2042) decided by the Supreme Court of India. In this judgment it was held by the Supreme Court of India that "green ginger" is included within the meaning of the word "vegetables" and while reaching that conclusion the Supreme Court of India had observed that the word `vegetable' in the schedule to the Bengal Finance (Sales‑tax) Act of 1941 is to be construed as understood in common parlance and it must be given its popular sense meaning "that sense which people conversant with the subject matter with which the statute is dealing would attribute to it." We are in full agreement with the observa tion made by the Supreme Court of India in this case. The learned counsel has also relied upon 1977 T L R (NOC) 3 (All.) in which it was held that biscuit did not come within the category of cooked food". In that case, "cooked food" was equated with "Pakaya Hua Bhojan" and was observed that "Pakaya Hua Bhojan" was generally understood as food which was cooked and taken in a meal or "Bhojan ' that is breakfast, lunch or dinner and biscuit was generally taken as a snack or alongwith tea and it was not generally taken for item of food or "Bhojan". In our view this judgment also does not support the contention of the learned counsel for the applicant, as in this judgment the words "cooked food" were being interpreted and further "cooked food" had been equated with "Pakaya Hua Bhojan". In the instant cases the words used are "food articles" served in Hotels and restaurants. Learned counsel for the applicant had also relied upon item No. 21 in the Notification dated 27‑6‑1951. Item No. 21 exempted certain products of bakeries and this item was later on deleted by a Notification dated 1‑7‑1963 of the Government and in tae original item No. 21 a new item was inserted, which reads as follows :‑‑ "

21. Products of power loom units equipped with not more than 20 power looms." It was contended by the learned counsel for the applicant that by deleting the original item No. 21 from the exemption list, bakery products became liable to sales‑tax. It may be observed here that item No. 20 referred to food articles served in hotels and restaurants and no restriction was placed by way of excluding bakery items from food articles served in hotels and rest aurants. Further original item No. 21 referred to products of bakeries that is products manufactured by bakeries. In the instant cases the Tax authorities were not dealing with products of bakeries but bakery products or items manufactured and served by hotels. In our view, therefore, even by deletion of the original item No. 21, bakery products or items manufactured and served in hotels and restaurants did not become liable to sales‑tax.

4. Mr. S. Haider Ali Pirzada then relied upon a letter of the Central Board of Revenue No. 9(821 S T dated 8‑12‑1968, whereby in the opinion of the Central Board of Revenue bakery products manufactured and sold in the hotels were not exempt from sales‑tax. Learned counsel for the applicant argued that Central Board of Revenue is the authority to make rules and this letter of Central Board of Revenue is to be placed on the same footing and should be given the same status as any other rule and relied upon Province of West Pakistan v. Din Muhammad (P L D 1964 S C 21) for the proposition that departmental instructions issued by rule‑making authority should have the same effect as rules formally made by the authority. The principle in this Supreme Court case is not applicable in the instant cases as under section 39 of the Sales‑tax Act, 1951, rules made by the Central Board of Revenue are required to be published in the official Gazette and only then they have effect. Admittedly, this letter of Central Board of Revenue has not been' published in the official Gazette and as such it cannot be accepted as provision amending or supplementing the notifications or rules already in force.

5. As we have taken the view that item No. 20 of Notification dot 17‑6‑1951 included bakery/products items manufactured and served by the respondent /assessee in its hotel and that the removal of original item No. 21 did not affect the exemption of bakery items manufactured and served in its hotel by the respondent/assessee for the assessment years in question, the two questions referred to us are answered in the affirmative. There will be no order as to costs. Question answered in affirmative.