Food - substantial and satisfying ?
IN a country where the Legal System depends on definitions to answer every question, the definitions often lead to funny situations and in our Tax Laws implementation, where every defined word is twisted to suit perverted interpretations, God knows where the Law goes. While 'income' is not properly defined under the Income Tax Act, 'goods' not defined under central Excise and 'service' not defined under the respective Acts, we have a huge list of definitions for various words and terms.
Can you imagine a law defining food ? Service Tax Notification 1/2006 defines food as"a substantial and satisfying meal ” . The abatement under the notification is available only if the catering service provider provides a substantial and satisfying meal. Now who will decide if the meal was substantial and satisfying? The Tribunal had an occasion to consider whether "high Tea” was a substantial and satisfying meal.
Recently, the Chennai Bench of the CESTAT dealt with the issue in a big case. Revenue had denied abatement on the ground of a substantial and satisfying meal and they had taken statements from senior officers of M/s.HCL Infosystems Ltd. M/s.Cooper Bussmann India (P) Ltd., M/s.L&T Ltd (who consumed the alleged food ) apart from the caterer in a case where the tax involved was a mighty 3.5 lakh rupees. The party had to go through the Assistant Commissioner, Commissioner(Appeals) and reached the Tribunal. The Tribunal heard the case on 30.07.2010 and passed an order on 13.09.2010 - remanding the case to the adjudicating authority to satisfy himself that what was being supplied was ‘food' - that is"a substantial and satisfying meal'.
Now how can the caterer satisfy the Assistant Commissioner that the food supplied in 2004 was food indeed and it was"a substantial and satisfying meal?
He will have to make another trip to the Tribunal - we will report that - maybe after six years!