Pizza and sandwiches are classified as “cooked foods” – Rajasthan High Court

Pizza and sandwiches are classified as “cooked foods” by the Rajasthan High Court

The term “cooked food” is limited to items that are typically consumed at regular mealtimes, according to the Bench of Justice Sameer Jain. The Tax Board’s justification that “pizza” or “sandwiches” cannot be regarded as “meals,” however, is not totally accurate given the passage of time and changes in society eating customs. In any case, the Tax Board’s conclusion cannot be upheld because it is not supported by sufficient evidence.

The petitioner-assessee operates restaurants that receive ratings of less than three stars, and the “pizza” served there is made through the baking process, one of the several methods of cooking.

Pizza, according to the petitioner, is a complete food that contains all the nutrients the human body needs, including carbs, fats, vitamins, proteins, and minerals. Similar to how a sandwich is made, a sandwich is made by halving a loaf of bread that is prepared at a restaurant and adding either a veggie patty or a non-vegetarian ingredient like beef or chicken (the fillings), which are cooked by frying and heating. The petitioner-assessee prepares and sells the sandwich, which comes with a variety of fresh veggies and sauces and is in and of itself a complete meal with excellent nutritional value and nutrients.

According to the Rajasthan High Court’s Jaipur Bench, the sale of “pizza” and “sandwiches” would qualify as the sale of “cooked food,” and the sale would be eligible for the exemption of payment of Value Added Tax (VAT) over 5%.

Pizza and sandwiches are “baked branded products,” according to the Tax Board, and not “food.” The Tax Board has determined that items like “pizza” and “sandwiches” would not fall under the definition of “cooked food” since, according to the notion of common parlance, they are not “food.” The general public does not consider these foods to be a replacement for regular meals, which typically consist of rice, vegetables, chapatti or roti, and other grains. However, this Tax Board judgement is likewise incorrect because it was made without considering any supporting data at all. The Tax Board only relied on rulings that did not address the relevant issue and were out of date in terms of technology, culture, eating habits, and time.

According to the petitioner, the government has not met its obligation to demonstrate that “pizza” and “sandwich” are not prepared foods. No expert or technical opinion was requested, and no supporting documentation was submitted to support the claim. Instead, the revenue has interpreted definitions from “Wikipedia” incorrectly even after relying on them.

The petitioner claimed that in subsequent notifications dated July 14, 2014, and March 9, 2015, the state administration had put “pizza” and “sandwich” in the general category of “cooked food.” Thus, it is argued that the state government intended to treat “pizza” and “sandwich” as “cooked food” throughout.  Therefore, under the notification, the sale of “pizza” and “sandwiches” would qualify as the sale of “cooked food.”

According to the petitioner, the government has not met its obligation to demonstrate that “pizza” and “sandwich” are not prepared foods. No expert or technical opinion was requested, and no supporting documentation was submitted to support the claim. Instead, the revenue has interpreted definitions from “Wikipedia” incorrectly even after relying on them.

The petitioner claimed that in subsequent notifications dated July 14, 2014, and March 9, 2015, the state administration had put “pizza” and “sandwich” in the general category of “cooked food.” Thus, it is argued that the state government intended to treat “pizza” and “sandwich” as “cooked food” throughout.  Therefore, under the notification, the sale of “pizza” and “sandwiches” would qualify as the sale of “cooked food.”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. Pizza and sandwiches are not considered to be “cooked food” in India, and particularly not in the State of Rajasthan.

The court said that the state government itself considered foods like “pizza” and “sandwiches” to be “cooked food” according to the notification dated March 9, 2015.

ORDER BY THE  COURT

The Court maintains that the posed legal question(s) are resolved in the petitioner-assessee’s favour and against the respondent-revenue. Pizza and sandwiches are therefore considered to be “cooked foods.” the petitioner-assessee receive the consequence relief within a 90-day timeframe.