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  tax

56. Food  including  vegetative  or animal  preparations   sold  in airtight  containers  and  food colours,  essences  of  all  kinds and  powders  or  tablets  used for  making  food  preparations or beverages

At  the  point of first sale in the State by a dealer  who is liable  to  tax under Section 5

12.5%

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87. Non-alcoholic  drinks, squashes,  sauces  Aerated waters,  mineral  water, beverages  Horlicks,  Boost, Bournvita, Complan, Glucose- D, Glucovita and similar items whether  bottled  or  canned  or packed Explanation : Powders, tablets 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.

Do 20%

During 1998-99

56. Food  including  vegetative  or animal  preparations  sold  in airtight  containers  and  food colours, essences of all kinds and powders or tablets used for making food preparations.

At  the  point  of first  sale  in  the State  by  a dealer  who  is liable  to  tax under Section 5

12.5%

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87. Non-alcoholic  drinks, squashes,  sauces  Aerated waters,  mineral  water, beverages  Horlicks,  Boost, Bournvita,  Complan, Glucose-D,  Glucovita  and similar items whether bottled or canned or packed Explanation  :  Powders, tablets  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.

Do 20%

During 1999-2000 till 31.12.1999

87. Non alcoholic drinks whether bottled or canned or packed Explanation: Powders, tablets granules  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.

Do 25%

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124A Squashes,  sauces  soda, mineral water Horlicks, Boost Bournvita,  Complan, Glucose-D,  Glucovita  and similar items whether or not bottled canned or packed Explanation:  powders, tablets,  granules  and concentrates  used  for  the preparation  of  beverages shall, whether or not they are bottled or canned, be liable to tax under this entry.

Do 20%

From 1-1-2000

97. Non alcoholic drinks whether or  not  bottled  or  canned  or packed Explanation  _  Powders, tablets,  granules  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.

Do 25%

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141 Squashes, sauces, fruit juice, fruit  pulp,  soda,  mineral water,  Horlicks,  Boost, Bournvita Complan, Glucose- D,  Glucovita  and  similar items whether or not bottled canned or packed. Explanation-Powders,  tablets Granules  and  concentrates used  for  the  preparation  of beverages  shall,  whether  or not  they  are  bottled  or canned,  be  liable  to  tax 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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