Choco Choza v Sales Tax Officer
The two-judge Bench of Chief Justice AP Sahi and Justice Senthilkumar Ramamoorthy dealt with the case. The main issue of the case was-
Can an unbranded cake sold by a bakery be viewed in the same way that a trademarked McVeggie burger is treated when it comes to taxation?
Or an idli sold by popular restaurant chain Murugan idlis or a dosa sold by Saravana Bhavan be viewed as branded good for tax purposes?
Facts of the case-
Choco choza bakery selling premium confectioneries, cakes, etc. with an outlet in Coimbatore, is the latest to weigh in on these questions, by joining a fray of parties challenging the State tax authority’s interpretation of “branded” goods under Section 2 (9) of the Tamil Nadu Value Added Tax Act, 2006 Choco Choza v. Sales Tax Officer.
Section 2(9) of the Act defines, branded” as any good sold under a name or a trademark registered or pending registration or pending registration of transfer under the Trade Marks Act.
The dealers of unbranded food or drink provided that they are not starring hotels recognized by the Tourism Department are subject to levy 5% tax as per section 7(1) (b) of the VAT Act. It was thus, noted by the bench that, “all the same, the Court expressed some reservation over whether this is a case of an incorrect application of the law or a whether the validity of Section 2 (9) itself should be put to test.”
“That will be a wrong interpretation which can be contested…but that cannot be ground to render the provision ultra vires”, the Bench remarked”.
the tax exemption claimed for the cookies sold by Cookie Man on the claim that they were unbranded goods was ended by the apex court in the Australian Cookie Man case
The case is posted to be taken upon on 18th November.