Commissioner of Income Tax vs K.I.C. Food Products (P) Ltd.

Madan B. Lokur, J.—The following question of law has been referred for our opinion u/s 256(1) of the Income Tax Act, 1961 reads as

follows:

Whether on the facts and in the circumstances of the case, the Tribunal was right in law to hold that ice cream is not a confectionery item as listed

in item No. 6 of XIth Schedule and in granting investment allowance to the assessed?

Our attention has been drawn to a case pertaining to the same assessed being Commissioner of Income Tax Vs. Kwality Ice Creams (P.) Ltd., .

In that decision rendered by the Calcutta High Court, reliance was placed upon Milco Ice-cream Co. v. CST [1982] 49 STC 294 and CST v.

Dayal Singh Kulfiwala [1982] 49 STC 295, both decided by Allahabad High Court. In addition thereto, reliance was placed upon a decision of

this Court in Kwality Ice Cream Co. & Restaurant v. STO [1974] 34 STC 396.

In all these decisions, it has been held that ice-cream is a milk product and cannot be said to be a confectionery item. This Court had considered

a decision of the Supreme Court in Ramavatar Budhaiprasad v. Assistant STO [1961] 12 STC 286, wherein it was observed as follows:

It is not the dictionary meaning of a term that will invariably prevail in the construction of a statute. The rule of interpretation in such cases is that

particular words used by the Legislature in the denomination of articles should be understood according to the common commercial understanding

of the term used and not in their scientific or technical sense, for the Legislature does not suppose our merchants to be naturalists or geologists or

botanists.

In view of the above, the Calcutta High Court was of the opinion that ice-cream cannot be said to be confectionery item.

We find no reason to take a view different from that already taken by this Court, the Allahabad High Court as well as the Calcutta High Court.

In fact, in view of the decision of the Supreme Court in Ramavatar Budhaiprasad, the question is no longer open for consideration.

Under the circumstances, we answer the question in the affirmative, in favor of the assessed and against the Revenue.

The reference is disposed of accordingly.