No Tax Exemption On Bakery Products Sold At Snack Bar: Madras High Court
The Madras High Court held that there is no tax exemption for bakery products sold in a snack bar. Justices S.M. Subramaniam and C. Saravanan were addressing the issue of whether bakery products sold in a snack bar are covered under the notification G.O.P.No.570 dated 10th June 1987 and exempted from tax. The assessee/petitioner is running a restaurant in which they are involved...
The Madras High Court held that there is no tax exemption for bakery products sold in a snack bar.
Justices S.M. Subramaniam and C. Saravanan were addressing the issue of whether bakery products sold in a snack bar are covered under the notification G.O.P.No.570 dated 10th June 1987 and exempted from tax.
The assessee/petitioner is running a restaurant in which they are involved in the activity of preparing food and drinks. Admittedly, the food and drinks are not sold under any brand name.
At the assessee's eating house, they sell bakery products to their customers. The assessee contended that pursuant to the notification in G.O.P.No.570 dated 10th June 1987, the selling of bakery products in a snack bar is exempted and therefore, the assessee is entitled to the benefit of exemption under the said notification.
The assessee/petitioner submitted that a similar issue has been considered by the Tamil Nadu Taxation Special Tribunal in T.C.(R) No.2649 of 1997 dated 27th day of July, 1999. The petitioner herein is the petitioner in the said TC case. The Taxation Special Tribunal made a finding that bakery products sold by the assessee would fall under the heading “food and drinks” mentioned in the said Government Order, and those items are being sold from a restaurant licensed by the Corporation of Chennai. Thus, the assessee is eligible for the grant of exemption under the Government Order, even in respect of the bakery products.
The department/respondent submitted that the case of the assessee would squarely fall under Entry 48 of III Schedule and therefore, the selling of bakery products are not covered under the exemption clause. Only tea, coffee, and green tea, as stipulated under Entry 48 of Schedule III alone are covered under the exemption notification.
The bench looked into Sl.No.9 to I Schedule and observed that the bakery products are not included and thus would not fall under the exemption notification. In fact, the bakery products are stated in I Schedule of Part B of Sl.No.11.
The said Sl.No.11 of part B of I Schedule has not been exempted under the notification. Therefore, the assessee's case would not fall under the exemption notification, added the bench.
The bench concluded that the Original Authority and the appellate Tribunal have rightly interpreted the exemption notification and the scope of its applications.
In view of the above, the bench dismissed the appeal.
Case Title: Cakes N Bakes v. The Commercial Tax Officer
Citation: 2025 LiveLaw (Mad) 326
Case Number: W.P.No. 19651 of 2007
Counsel for Petitioner/Assessee: Mr. K.A. Parthasarathi
Counsel for Respondent/Department: Mr. C. Harsharaj