' EJAZ AFZAL KHAN, C.J.---Messrs Balana Restaurant Peshawar, appellant herein supplying cooked and prepared food to the PTC for its workers in its canteen at Akora Khattak, has filed Tax References Nos.4,5,6,7, and 8 of 2009, by raising the question, whether the food stuff cooked in house and served in Industrial Canteen is liable to Sales Tax under sections 3 and 13 (1) of the Sales Tax Act, 1990?
2. As all the Tax References involve similar question of law, they are disposed of by this single judgment.
3. Learned counsel appearing on behalf of the appellant by referring to item 3 (vii) of the Sixth Schedule contended that when the food stuff cooked or prepared in messes run on the basis of mutuality and Industrial Canteens for workers of a particular class are exempt under section 13(1) read with Sixth Schedule of the Sales Tax Act, the food cooked, prepared and supplied by the appellant cannot be taxed and that the Tribunal erred in holding that it is liable to be taxed. Such supply, the learned counsel added, is exempt from Sales Tax whether it is made by the PTC itself or any other person as the provision of the Schedule cannot be made person specific by any attribute.
4. As against that, the learned counsel appearing on behalf of the respondent contended that the appellant cannot claim exemption, when supply of food to PTC, is made in the course or furtherance of a taxable activity. Only the PTC, the learned counsel submitted, could claim exemption, had it itself cooked, prepared and served the food in the Canteens without any pecuniary consideration. The appellant, the learned counsel submitted, supplying the food for profit cannot push itself in the orbit where it can claim exemption.
5. We have gone through the record carefully and considered the submissions of the learned counsel for the parties.
6. Before we answer the question so raised, it is worthwhile to know, what is the object and purpose of the legislature in exempting this activity? A food stuff cooked, prepared and served elsewhere is liable to be taxed under the Sales Act but the one cooked, prepared and served in messes and canteens of Industrial concerns is exempt. What is the rationale or raison deter behind this exemption? Answer to the question is provided by the Schedule itself. It exempts the food cooked, prepared and served in the messes because they are run on the basis of mutuality. It exempts the food cooked, prepared and served in the Canteens because it is provided to the workers of a particular class by such concerns, gratis or without any pecuniary consideration. The appellant admittedly embarking on this activity purely for profits or pecuniary consideration cannot push itself into the ambit of relevant provision so as to justify its claim for exemption. PTC could have claimed this exemption, had it cooked, prepared and served the food in the Canteen itself, because such activity by the company could not have been construed as the one in furtherance of taxable activity because of its being on the loosing end. The appellant supplying the food in its capacity as a registered person in furtherance of taxable activity to PTC another registered person cannot thus claim exemption, that too when it is on the receiving end. We thus do not subscribe to the view broached at the bar by the learned counsel for the appellant. Absence of a direct linkage between the appellant and the workers would be yet another reason in this behalf.
7. The argument that such supply is exempt from sales tax whether it is made by the PTC itself or any other person as the provisions of the Sixth Schedule cannot be made person specific by any attribute, has not impressed us, when the learned counsel for the appellant could not satisfy us vis- a-vis the element of mutuality, especially when it has not been disputed either in the fora below or this Court that the activity so embarked upon by the appellant is for pecuniary consideration.
When seen in this backdrop, we do not think, a person supplying the cooked and prepared food to an Industrial Canteen for business activity can be held to be exempt from Sales Tax under any canons of interpretation. The question formulated above is, therefore, answered accordingly. These References are, thus, disposed of.