Is it a Cake or a Cookie?

During our afternoon tea/coffee break, I learned of a very interesting case in the European Court of Justice a few years back. Evidently there is Value Added Tax (VAT) on luxury items, but not on basic foodstuffs. In Ireland and Britain, biscuits cakes are deemed necessities and are thus exempt from the tax, but chocolate-covered biscuits are considered a luxury and subject to a VAT at 17.5%. (But for some reason it doesn't apply to chocolate-covered cakes.) So there have been several court cases disputing whether a chocolate-covered food is a cake or a biscuit. For example, McVities and HM Customs & Excise argued over the Jaffa Cake (a soft cake/cookie filled with jam and covered with chocolate), as did Marks & Spencer over their chocolate-covered teacake that had been deemed a confectionery.

So what settled the dispute? A soft/hard line of reasoning: it's a cake if when it goes stale it gets hard, and it's a cookie if when it goes stale it gets soft.

Thus McVities and M&S won their case in the Tribunal.