In S.B. Sales Tax Revision / Reference No. 58/2013 - RAJ HC - Rajasthan High Court rules 'pizza' and 'sandwiches' qualify as 'cooked foods'; eligible for VAT exemption above 5%
Justice Sameer Jain [05-05-2023]

Read Order: Devyani International Limited and Ors v. The Additional Commissioner and Ors

Chahat Varma

New Delhi, June 7, 2023: The Rajasthan High Court has ruled that 'pizza' and 'sandwiches' are 'cooked foods' and are entitled to an exemption from paying Value Added Tax (VAT) in excess of 5%.

In the present case, the question pertained to classification of ‘pizza’ and ‘sandwich’ under the Rajasthan Value Added Tax Act, 2003 (RVAT Act). The common issue for consideration of the court was whether ‘pizza’ and ‘sandwich’ fall within the ambit of ‘cooked food’ to claim benefit of exemption notification dated 09.03.2010.

The single-judge bench of Justice Sameer Jain noted that in the instant case, the revenue utterly failed to adduce any evidence, technical or otherwise, to substantiate its claim that ‘pizza’ and ‘sandwich’ are not ‘cooked food’. The revenue had not brought on record any expert opinion, any scientific study or survey to prove that ‘pizza’ and ‘sandwich’ were in-fact not ‘cooked food’.

The court criticized the Additional Commissioner's conclusion that 'pizza' or 'sandwich' are not considered 'cooked food' based on factors such as preparation on gas burner, with aid of oil/ghee and spices, using exclusively fresh ingredients and then served with traditional cutlery. The court stated that it was the duty of the revenue to provide evidence to prove that these factors are essential for determining what constitutes 'cooked food.' Since the revenue failed to do so, the Assistant Commissioner wrongly relied on these factors and wrongly accepted them on their face value.

The court noted that societal eating norms have changed over time, and the reasoning that 'pizza' or 'sandwich' cannot be considered 'meals' does not hold true. The court also stated that the finding of the Tax Board was not based on sufficient evidence, and therefore, it cannot be sustained.

The court further noted that since the State Government has included ‘pizza’ and ‘sandwich’ in the broad category of ‘cooked food’ in subsequent notifications dated 14.07.2014 and 09.03.2015, therefore the sale of ‘pizza’ and ‘sandwich’ would qualify as sale of ‘cooked food’ under the notification dated 09.03.2010 as well.