:1: bgp bgp bgp IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION SALES SALES SALES TAX APPLICATION NO.8 OF 2006 TAX APPLICATION NO.8 OF 2006 TAX APPLICATION NO.8 OF 2006 IN IN IN REFERENCE REFERENCE REFERENCE APPLICATION NO.121 OF 2001 APPLICATION NO.121 OF 2001 APPLICATION NO.121 OF 2001 The Commissioner of Sales Tax, Maharashtra State, Mumbai - 400 010. ..Applicant Vs. Kwality Frozen Foods Ltd. ..Respondent 254-C, Dr.Annie Besant Road, Worli, Mumbai - 400 025. Mr.Vinay Sonpal, A.G.P.for the Applicant. Mr.P.C.Joshi for the Respondent. CORAM CORAM CORAM :- DR.S.RADHAKRISHNAN & :- DR.S.RADHAKRISHNAN & :- DR.S.RADHAKRISHNAN & A.V.NIRGUDE, A.V.NIRGUDE, A.V.NIRGUDE, JJ. JJ. JJ. DATE DATE DATE : 20TH JUNE, 2008 : 20TH JUNE, 2008 : 20TH JUNE, 2008 P.C. P.C. P.C. 1. By this Application, the Applicant Commissioner of Sales tax seeks reference on the following substantial question of law: Whether on the facts and in the circumstances of the case and on true and correct interpretation of the Notification entry 374 issued under Section 41 of the Act, read with Schedule Entry C-II-35(1), was the tribunal justified in law in granting prospective effect to the determination order passed by the Commissioner though the said notification entry is quite clear and unambiguous ? 2. Heard Mr.Vinay Sonpal, the learned A.G.P. for the Applicant and Mr.P.C.Joshi for the Respondent. The Respondent herein is a manufacturer of ice-creams and it is the case of the Respondent that right from :2: 1960 till 30th June,1981 ice-creams were admittedly treated and assessed as "Sweet and Sweetmeats" under the Bombay Sales tax Act. It is the case of the Respondent that even after 1st July,1981 ice-creams were not placed in separate schedule Entry but were clubbed in the same schedule Entry and were generally considered to be "Sweet and Sweetmeats". 3. The Commissioner of Sales Tax by a judgment and order dated 29th March,1995 held that ice-creams would be covered under Entry C-II-35(1) and liable to tax @ 8 Paise per rupee without getting any benefit of Notification Entry 374 and even the previous liability of the Applicant was not permitted under Section 52(2) of the Bombay Sales Tax Act. 4. Aggrieved thereby, the Respondent along with another Appellant had approached the Maharashtra Sales Tax Tribunal. The said Tribunal by a detailed judgment dated 23rd March,2001 concurred with a view of the Commissioner of Sales Tax that the ice-creams were not eligible to tax concession under the Notification Entry 374 and that the ice-creams were liable to tax @ 8% under Schedule Entry C-II-35(1) was confirmed. Before the Tribunal, the Respondent had strongly argued that even our High Court in M/s.Mangharm M/s.Mangharm M/s.Mangharm & Co. (37 STC 599) & Co. (37 STC 599) & Co. (37 STC 599) had came to a conclusion that there was a difference between "Sweet" and "Sweetmeats" and also held that the term "Sweets" :3: is a wider generic term, which includes various terms of sweets and one of them would be "Sweetmeats". 5. By the aforesaid judgment, the Tribunal in paragraph No.11 had categorically observed with regard to issue of giving a prospective effect. The Tribunal had observed that since the period from 1st January,1960 to 30th June,1971, ice creams were admittedly treated and assessed as "Sweets and Sweetmeats". In the said judgment, the Tribunal had also observed that even after 1st July,1981, they were placed in a separate schedule Entry but were clubbed in the same schedule Entry which was generally considered to be of "Sweets and Sweetmeats". The Tribunal had further observed in the said paragraph that all these factors perhaps gave the impression that the treatment given to ice creams as "Sweets" prior to 1st July,1981 was continued even after 1st July,1981. 6. Under the aforesaid facts and circumstances of the case, the Tribunal in the aforesaid judgment had clearly directed that its decision will be prospectively effective from the date of its communication and shall not adversely affect the past liability of the Appellant, provided they have not collected taxes in excess of 4% in respect of their sales of ice creams effected during the period from 1st April,1994 till the date of communication of the :4: said decision. 7. Aggrieved by the aforesaid order of the Tribunal, the Commissioner of Sales Tax had filed an application being Reference Application No.121 of 2003 before the said Tribunal on the issue of giving prospective effect to the said ruling and sought a reference on the same. The Tribunal, again by a detailed order dated 30th September,2005 had rejected the same and again reiterated that during the period from 1st January,1960 to 30th June,1981 ice-creams were admittedly treated and assessed as "Sweet and Sweetmeats". Even after 1st July,1981 ice-creams were not placed in separate schedule Entry but were clubbed in the schedule Entry, which was considered as "Sweets and Sweetmeats". The Tribunal went on further, and had observed that after 1st July,1981 the tax rate was the same and therefore, an impression was created that the treatment given to ice creams as "Sweets" prior to 1st July,1981 was continued even after 1st July,1981. Under the aforesaid facts and circumstances of the case, prospective effect was given and that shall not affect the past liability of the Respondent from the date of communication of the order provided they have not collected taxes in excess of 4%. 8. Mr.Sonpal, the learned A.G.P. very vehemently sought to contend that the Tribunal had erroneously given prospective effect in its earlier order dated :5: 23rd March,2001 as well as in the subsequent judgment and order dated 30th September,2005 and had refused to refer the same to this Court by way of reference. 9. Mr.Joshi, the learned Counsel appearing on behalf of the Respondent strongly contended that the Tribunal had only given a prospective effect based on a justifiable ground and the order passed by the Tribunal was not arbitrary or without any reason with regard to grant of such prospective effect. Mr.Joshi pointed out that the right from 1st January,1960 till 30th January,1981 and even after 1st July,1981 the ice creams were to be construed to be "Sweets" and even it was continued to be assessed at the same rate as that of "Sweets". Mr.Joshi contended that under the aforesaid facts and circumstances of the case, the Tribunal was fully justified in giving a prospective effect and the discretion exercised by the Tribunal in that behalf is rational, just and proper. 10. Having heard both the learned Counsel for the parties and after perusal of the earlier order dated 23rdMarch,2005 as well as subsequent judgment and order dated 30th September,2005 passed by the Tribunal, it is explicitly clear that till the judgment was delivered by the Tribunal on 23rd March,2001, there was a clear impression that the ice-creams would be covered within the meaning of "Sweets" and in fact right from 1st January,1960 till :6: 30th June,1981 and even after 1st July,1981 till the aforesaid decision, every one had an impression that ice-creams were covered within the Entry "Sweets" and "Sweetmeats". Having regard to the facts and circumstances of the case, we do not find any substantial question of law in the above, since the Tribunal had fairly on a rational basis exercised its discretion in favour of the Assessee to give prospective effect. Under the aforesaid facts and circumstances of the case, we do not find any ground made out for interfering with the above and the above Sales Tax Application is devoid of merits. Hence, the same stands dismissed. (A.V.NIRGUDE,J.) (A.V.NIRGUDE,J.) (A.V.NIRGUDE,J.) (DR.S.RADHAKRISHNAN,J.) (DR.S.RADHAKRISHNAN,J.) (DR.S.RADHAKRISHNAN,J.)