Supreme Court of India
M/S. PIOMA INDUSTRIES ETC. ETC.versusSTATE OF KERALA
- Citation
- 2008 INSC 869
- Decided
- 25 July 2008
- Disposal
- Case Partly allowed
- Bench
- ARIJIT PASAYAT
Holding
The Supreme Court held that the lower authorities had not properly considered the classification of Rasna as a beverage and the effect of the new entries, and therefore remitted the issue to the Tribunal for determination.
Summary
Mis. Pioma Industries and Mis. Rasna Pvt. Ltd appealed against the State of Kerala challenging the tax classification of "Rasna" under the Kerala General Sales Tax Act, 1963. The assessing officer, the first appellate authority, the Tribunal and the Kerala High Court had held that Rasna, a powdered fruit drink, was a "non‑alcoholic drink" and taxed it accordingly. The appellants contended that Rasna should be treated either as a vegetative food preparation or, alternatively, as a "beverage", which would affect the applicable tax rate. The Supreme Court observed that the lower authorities had not examined whether Rasna could be classified as a beverage nor considered the impact of the newly introduced Entries 124A and 141 for the assessment year 1999‑2000. Consequently, the Court partially allowed the appeal and remitted the matter to the Tribunal to determine the correct classification for the 1997‑98 assessment year and the effect of the new entries for 1999‑2000.
Issues considered
- Whether Rasna is taxable as a "beverage" or as a "non‑alcoholic drink" under the Kerala General Sales Tax Act, 1963.
- Whether the introduction of Entries 124A and 141 for the assessment year 1999‑2000 alters the tax liability of Rasna.
- Whether the lower authorities failed to consider the factual question of Rasna being a beverage.
Legislation cited
- Kerala General Sales Tax Act, 1963s. Entry 124A, s. Entry 141, s. Entry 87, s. Entry 97, s. Schedule I - Entry 56
Subjects
tax classificationbeveragenon‑alcoholic drinkKerala General Sales Tax Actremandassessment year
Judgment
(2008] 11 S.C.R. 355
..,
MIS. PIOMA INDUSTRIES ETC. ETC. A
v.
STATE OF KERALA
(Civil Appeal No. 4639 of 2008)
JULY 25, 2008
B
.._ "*- [DR. ARIJIT PASYAT AND P. SATHASIVAM, JJ.]
Kera/a General Sa/es Tax Act, 1963 - Schedule I, En-
tries 56 and 57 (for year 1997-98) Entries 124 A (for the year
1999-2000) - 'Rasna' - Taxability- Whether as a 'beverage' c
or 'non-alcoho~ic drink' - Plea of assesseee that it is taxable
as 'vegetative food preparation' or 'beverage' but not 'non-a/-
coholic drink' - Authorities/Courts below holding it as 'non-a/-
coholic drink' - Held: the assessing authority did not consider
whether the article could be a 'beverage' - Effect of introduc-
D
tion of entries 124A and 141 also not considered - Hence
matter remitted to Tribunal.
The question for consideration was whether 'Rasna'
is taxable as 'beverage' or 'non-alcoholic drink'. The au-
thorities and courts below had held that the same was a E
'non-alcoholic drink'. Hence the present appeal.
Partly allowing the appeal, the Court
HELD: The assessee had taken the stand that the
article in question was 'vegetative food preparation' and F
----+
in the alternative it was a 'beverage'. 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 Tribunal and the High
Court. Whether a particular article can be called as a 'bev-
G
erage' has to be factually decided. Similarly, the effect of
-
~
"(
the introduction of the Entries 124A and 141 in the As-
sessment year 1999-2000 has not been considered. There-
fore, the effect of the change from 1.1.2000 has also not
355 H
356 SUPREME COURT REPORTS [2008] 11 S.C.R.
A been considered and has not been analysed. In the cir- ""
cumstances, the matter is remitted to the Tribunal to ex-
amine whether 'Rasna' can be treated as 'beverage' for
the assessment year 1997-98; and what is the effect of
the Entries 124A and 141 vis-a-vis· Entry 97 for the Assess-
B ment year 1999-2000. [Paras 7 and 8] [359-H; 360-A-C]
~
CIVILAPPELLATE JURISDICTION: CivilAppealNo. 4639
of.2008
From the final Judgment ~nd Order dated 3.8.2005 of the
c High, Court of Kerala at Ernakulam in ST. Rev. Nos. 271 and
.353 of 2003 and 320 of 2005
Mathai M. Paikeday, Shishir Pinaki, Amit Singh and Sanjay
· Jain for the Appellant.
T.L.V. Iyer, P.V. Dinesh and T.P. Sindhu for the·R_espon-
JD dent.
The Judgment of the Court was delivered by·
· DR. ·ARIJIT.'PASAYAT, J. 1. Leave granted.
E 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. Mis. Pjoma Industries, and
Mis. Rasna Pvt. Ltd. The assessment years involved are 1997-
98 and 1999-2000. The dispute lies within a very narrow com-
F. pass.
3. The question is whether "Rasna" is taxable as a 'bever-
age' or 'non-alcoholic drink'. For the two assessment yea,rs the
.relevant entries were Entry 56 and Entry 87 respectively for the
G . year 1997-98 and forthe year 1999-2000Entry12~A. 141 and
.. 97 respectively. The assessing officer, the first Appel.late Au-
.. thority, the Tribunal and the High·Court held that "Rasna" is to I>-
·be taxed as 'non-Alcoholic drinl<'. · .,,, ...
4. According to the learned counsel for the appellants,
H 'Rasna' is a powder which is nothing but a soft drink concen-
· M/S. PIOMA INDUSTRIES ETC. v. STATE 357
OF KERALA [DR. ARIJIT PASAYAT, J.]
trate and cannot be taken to be as 'non-alcqholic drink'. It is A
nothing but a fruit in a powder form and a vegetative food prepa-
ration. It is pointed out that the 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 8
... -1. 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 . c
follows:
In the year 1997-98
I, Entry
No.
Details of goods Point of levy
Rate of
tax
D
56. Food including vegetative or At the point of 12.5%
, ·~ animal preparations sold in first sale in the
airtight containers and food State by a
colours, essences of all kinds dealer who is
and powders or tablets used liable to tax un-
for making food preparations der Section 5 · ·E
or beverages
87. Non-alcoholic drinks, squashes, Do 20%
saucesAerat~d waters, mineral
wat~r. beverages Horlicks,
F
Boost, Boumvita, Complan, Glu-
case- D, Glucovita and similar
items whether bottled or
canned or packed
Explanation : Powders, tablets G
and concentrates used for the
preparation of non alcoholic
drinks, shall whether or not
they are bottled or canned be
liable to tax under this entry. H
358 SUPREME COURT REPORTS [2008} 11 S.C.R.
A During 1998 - 99
'
56. . Food including vegetative or At the point of 12.5%
animal preparation·s sold ih first sale in the
airtight containers and food ·state by a
colours, essences of all kinds dealer who is
B
and powders or tablets used liable to tax un-
for making food preparations der Section 5
' Qr beverages ·
87. Non-alcoholic drinks, Do 20%
c squashes, sauces Aer~ted
waters, mineral water, bever- '.
ages Horlicks, Boost,
Bournvita, Complan, Glucose-
D,. Glucovita and similar items
whether bottled or canned or
D
'packed
Explanation : Powders, tab-
lets and concentrates used for
the preparation of non alco-
·E holic drinks, shafl whether or
not they are bottled or canned
be liable to tax under this en-
try.
During 1999-2000 tiil 31.12.1999
F
Food including vegetative or Do
87. 25%
animal preparations sold in
.airtight containers and food
colours, essences of all kinds
G and powders or tablets used
for making food preparations
or beverages
124A ·squashes, sauces soda, min:- Do 20%
'eral water Horlicks, Boost
H Bournvita, Complain,
MIS. PIOMA INDUSTRIES ETC. v. STATE ·359
OF KERALA [DR. ARIJIT PASAYAT, J.]
Glucose-D, Glucovita and A
similar items whether or not
bottled canned or packed Ex-
planation: powders, tablets,
granules and concentrates
· used for the preparation of B
beverages shall, whether or
not they are bottled or canned,
be liable to tax under this en-
try.
. From 1-1-2000
c
97- Non alcoholic drinks whether Do 25%
or not bottled or canned or
packed Explanation _ Pow-
ders, tablets, granules and D
concentrates used for the
prepar~tion of non-alcoholic
drinks, shall whether or not
they are qottled or canned be
liable to tax under this entry. E
141 Squashes, sauces, fruitjuice, Do 20%
fruit pulp, soda, mineral water,
Horlicks, Boost, Bournvita
Complan, Glucose-D,
Glucovita and similar items F
whether or not bottled canned
or packed. Explanation-Pow-
ders, tablets Granules and
concentrates used for the
preparation of beverages G
shall, whether or not they are
bottled or canned, be liable to
tax under this entry.
7. It appears that assessee had taken the stand that the H
360 SUPREME COURT REPORTS [2008] 11 S.C.R.
A 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
· Le.£ntries.87 and 124A. The explanation to the E'.ntries 87 and
B 124A has also relevance. Undisputedly, Entries 87 a~d 97 re-
late to non-alcoholic drinks. It appears that the stand taken by
the appellants aboutthe article being "beverage" has not been
specifically considered by the Assessing Authbrity,· the First
. appellate Authority, the Tribunal and the High Court. Whether a
C · particular.article can be called as a "beverage" has to be factu-
allrd~cided. 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. There-
fore, the effect of the change from 1.1.2000 has also not been
D considered and has not been analysed. In the circumstances,
we remitthe matter to the Tribunal to examine the following:
. 1. Whether 'Rasna' can be treated as beverage for the
assessment year 1997-98.
E' 2. To ·examine the effect of the Entries 124A and 141 vis-
a-vis ·Entry 97 for the Assessmen.t year 1999-2000.
9. The appeal is allowed to the aforesaid extent.
K.K.T. Appeal partly allowed.
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