Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICITON
CIVIL APPEAL NO. 4639 OF 2008
(Arising out of SLP (C) 13521 of 2006)
M/s. Pioma Industries etc.etc.
…Appellants
Versus
State of Kerala
…Respondent
JUDGMENT
Dr. ARIJIT PASAYAT, J.
1. Leave granted.
2. Challenge in this appeal is to the judgment of a Division
Bench of the Kerala High Court dismissing two revision
petitions filed by the appellants i.e. M/s. Pioma
Industries, and M/s. Rasna Pvt. Ltd. The assessment
years involved are 1997-98 and 1999-2000. The dispute
lies within a very narrow compass.
3. The question is whether “Rasna” is taxable as a
‘beverage’ or ‘non-alcoholic drink’. For the two assessment
years the relevant entries were Entry 56 and Entry 87
respectively for the year 1997-98 and for the year 1999-2000
Entry 124A, 141 and 97 respectively. The assessing officer,
the first Appellate Authority, the Tribunal and the High Court
held that “Rasna” is to be taxed as ‘non- Alcoholic drink’.
4. According to the learned counsel for the appellants,
‘Rasna’ is a powder which is nothing but a soft drink
concentrate and cannot be taken to be as ‘non-alcoholic
drink’. It is nothing but a fruit in a powder form and a
vegetative food preparation. It is pointed out that the
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legislature in its wisdom has taken out some of the items
which were earlier in Entry 87 and have grouped them
together under different Entries.
5. Learned counsel for the respondent-State on the other
hand submitted that by no stretch of imagination ‘Rasna’ has
been treated as ‘food or vegetative’ and has therefore been
rightly assessed as ‘non alcoholic drink’.
6. Entries for the two relevant assessment years read as
follows:
In the year 1997-98
| Entry No | . Details of goods | Point of levy | Rate of<br>tax |
|---|---|---|---|
| 56. | Food including vegetative or<br>animal preparations sold in<br>airtight containers and food<br>colours, essences of all kinds<br>and powders or tablets used<br>for making food preparations<br>or beverages | At the point<br>of first sale in<br>the State by a<br>dealer who is<br>liable to tax<br>under Section<br>5 | 12.5% |
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| 87. | Non-alcoholic drinks,<br>squashes, sauces Aerated<br>waters, mineral water,<br>beverages Horlicks, Boost,<br>Bournvita, Complan, Glucose-<br>D, Glucovita and similar items<br>whether bottled or canned or<br>packed<br>Explanation : Powders, tablets<br>and concentrates used for the<br>preparation of non alcoholic<br>drinks, shall whether or not<br>they are bottled or canned be<br>liable to tax under this entry. | Do | 20% |
|---|
During 1998-99
| 56. | Food including vegetative or<br>animal preparations sold in<br>airtight containers and food<br>colours, essences of all kinds<br>and powders or tablets used<br>for making food preparations. | At the point of<br>first sale in the<br>State by a<br>dealer who is<br>liable to tax<br>under Section 5 | 12.5% |
|---|
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| 87. | Non-alcoholic drinks,<br>squashes, sauces Aerated<br>waters, mineral water,<br>beverages Horlicks, Boost,<br>Bournvita, Complan,<br>Glucose-D, Glucovita and<br>similar items whether bottled<br>or canned or packed<br>Explanation : Powders,<br>tablets and concentrates<br>used for the preparation of<br>non alcoholic drinks, shall<br>whether or not they are<br>bottled or canned be liable to<br>tax under this entry. | Do | 20% |
|---|
During 1999-2000 till 31.12.1999
| 87. | Non alcoholic drinks whether<br>bottled or canned or packed<br>Explanation: Powders, tablets<br>granules and concentrates<br>used for the preparation of<br>non-alcoholic drinks, shall<br>whether or not they are<br>bottled or canned be liable to<br>tax under this entry. | Do | 25% |
|---|
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| 124A | Squashes, sauces soda,<br>mineral water Horlicks, Boost<br>Bournvita, Complan,<br>Glucose-D, Glucovita and<br>similar items whether or not<br>bottled canned or packed<br>Explanation: powders,<br>tablets, granules and<br>concentrates used for the<br>preparation of beverages<br>shall, whether or not they are<br>bottled or canned, be liable to<br>tax under this entry. | Do | 20% |
|---|
From 1-1-2000
| 97. | Non alcoholic drinks whether<br>or not bottled or canned or<br>packed<br>Explanation _ Powders,<br>tablets, granules and<br>concentrates used for the<br>preparation of non-alcoholic<br>drinks, shall whether or not<br>they are bottled or canned be<br>liable to tax under this entry. | Do | 25% |
|---|
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| 141 | Squashes, sauces, fruit juice,<br>fruit pulp, soda, mineral<br>water, Horlicks, Boost,<br>Bournvita Complan, Glucose-<br>D, Glucovita and similar<br>items whether or not bottled<br>canned or packed.<br>Explanation-Powders, tablets<br>Granules and concentrates<br>used for the preparation of<br>beverages shall, whether or<br>not they are bottled or<br>canned, be liable to tax<br>under this entry. | Do | 20% |
|---|
7. It appears that assessee had taken the stand that the
article in question was vegetative food preparation and in the
alternative it was a beverage.
8. It was also highlighting the fact that in 1999-2000 the
Entry 87 as it stood in the year 1997-98 was split into two
parts i.e. Entries 87 and 124A. The explanation to the Entries
87 and 124A has also relevance. Undisputedly, Entries 87
and 97 relate to non-alcoholic drinks. It appears that the
stand taken by the appellants about the article being
“beverage” has not been specifically considered by the
Assessing Authority, the First appellate Authority, the
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Tribunal and the High Court. Whether a particular article can
be called as a “beverage” has to be factually decided. That
analysis has not been done. Similarly, the effect of the
introduction of the Entries 124A and 141 with the Assessment
year 1999-2000 has not been considered. Therefore, the
effect of the change from 1.1.2000 has also not been
considered and has not been analysed. In the circumstances,
we remit the matter to the Tribunal to examine the following:
1. Whether ‘Rasna’ can be treated as beverage for
the assessment year 1997-98.
2. To examine the effect of the Entries 124A and
141 vis-a-vis Entry 97 for the Assessment year
1999-2000.
9. The appeal is allowed to the aforesaid extent.
…………………………
…J.
(DR. ARIJIT PASAYAT)
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……………………………J.
(P. SATHASIVAM)
New Delhi:
July 25, 2008
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