‘Pizza’ And ‘Sandwiches’ Are ‘Cooked Foods’: Rajasthan High Court Allows Exemption Of Payment Of VAT In Excess Of 5%

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 times. 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.

The restaurants run by the petitioner-assessee are below the 3-star category, and that ‘pizza’ is prepared by the process of baking, which is one of the various processes of cooking.

The petitioner submitted that ‘pizza’ is a complete food that provides valuable nutrients required by the human body, viz. carbohydrates, fats, vitamins, proteins, minerals, etc. Similarly, a sandwich is also prepared by cutting the bread loaf, which is also prepared in the restaurant, into half and then adding either a vegetable patty or a non-vegetarian item like meat or 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 with high nutritional value and nourishment, which is cooked by the petitioner-assessee and sold to various customers.

The Tax Board held that ‘pizza’ and ‘sandwich’ are ‘baked branded products’ and not ‘food’. The Tax Board has arrived at the conclusion that ‘pizza’ or ‘sandwich’ would not be covered under the category of ‘cooked food’ because these products are not ‘food’ as per the common parlance theory. The general public does not see these items as a substitution for regular meals, which include vegetables, chapatti or roti, rice, etc.

The petitioner contended that the department has not discharged its onus to prove that ‘pizza’ and ‘sandwich’ are not cooked foods. Neither an expert nor technical opinion was sought, nor was any evidence brought on record to prove their point. Rather, the revenue has relied upon definitions provided on ‘Wikipedia’ and even then has misconstrued the definition.

The petitioner submitted that the state government has included ‘pizza’ and ‘sandwich’ in the broad category of ‘cooked food’ in subsequent notifications dated July 14, 2014, and March 9, 2015. Therefore, it is contended that the intention of the state government was to treat ‘pizza’ and ‘sandwich’ as ‘cooked food’ all through.

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 court noted that, as per the notification dated March 9, 2015, the state government itself considered items like ‘pizza’ and ‘sandwich’ to be ‘cooked food’.

Case Title: M/s Devyani International Limited Versus The Additional Commissioner

Citation: 2023 LiveLaw (Raj) 47

Case No.: S.B. Sales Tax Revision / Reference No. 58/2013

Date: 05/05/2023

Counsel For Petitioner: Alkesh Sharma, Ayush Sharma, Himanshu Morwal, Vivek Singhal

Counsel For Respondent: Punit Singhvi, Ayush Singh

Click Here To Read The Order