Partly allowed¶66

M/S. Pioma Industries etc. etc. v. State of Kerala

Supreme Court25 Jul 20082008 INSC 869 · [2008] 11 S.C.R. 3552008 INSC 869

Case brief

AI extract

What is this about?

Rasna; Pioma Industries; State of Kerala; beverage versus non-alcoholic drink; vegetative food preparation; soft drink concentrate in powder form; Kerala General Sales Tax Act 1963; Schedule I Entry 56; Entry 87; Entry 97; Entry 124A; Entry 141; assessment years 1997-98 and 1999-2000; factual determination of 'beverage'; failure to consider alternative plea; remand to Tribunal; sales tax classification; Civil Appeal No. 4639 of 2008; (2008) 11 S.C.R. 355; decided 25-07-2008; Dr. Arijit Pasayat J.; P. Sathasivam J.

What did the court decide?

Appeal partly allowed; matter remitted to the Tribunal to decide (i) whether 'Rasna' can be treated as a 'beverage' for assessment year 1997-98 and (ii) the effect of Entries 124A and 141 vis-à-vis Entry 97 for assessment year 1999-2000. ¶66

M/S. Pioma Industries etc. etc. versus State of Kerala — Supreme Court (2008) — LawSathi Research

What the court decided

AI extract

Outcome

¶66

Issue for consideration

Whether 'Rasna' is taxable under the Kerala General Sales Tax Act, 1963 as a 'beverage' or as a 'non-alcoholic drink' for assessment years 1997-98 and 1999-2000. +2 more

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Court's answer

The appellants' stand that the article is a 'beverage' was not specifically considered by the assessing authority, the first appellate authority, the Tribunal or the High Court; whether a particular article can be called a 'beverage' has to be factually decided.

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Ratio / Principle

The effect of the introduction of Entries 124A and 141 with assessment year 1999-2000, and consequently the effect of the change from 1.1.2000, had not been considered or analysed by the authorities below.

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Key takeaways

The matter is remitted to the Tribunal (i) to examine whether 'Rasna' can be treated as 'beverage' for assessment year 1997-98, and (ii) to examine the effect of Entries 124A and 141 vis-à-vis Entry 97 for assessment year 1999-2000.ratio¶63
The appeal is allowed to the aforesaid extent, i.e., partly allowed.ratio¶66

Detailed headnote1 paragraphs

Supreme Court of India (Coram: Dr. Arijit Pasayat and P. Sathasivam, JJ.; judgment delivered by Dr. Arijit Pasayat, J.), Civil Appeal No. 4639 of 2008, decided July 25, 2008 — Taxability of 'Rasna' under the Kerala General Sales Tax Act, 1963, Schedule I: whether it is a 'beverage'/'vegetative food preparation' (Entry 56, 12.5%) or a 'non-alcoholic drink' (Entry 87, 20% for 1997-98; Entries 124A, 97 and 141 for 1999-2000). The assessing officer, first appellate authority, Tribunal and High Court had held it taxable as a 'non-alcoholic drink'. Held: the assessees' alternative plea that the article is a 'beverage' was never specifically considered by any authority or court below, and whether an article is a 'beverage' is a question of fact to be decided; further, the effect of the introduction of Entries 124A and 141 for AY 1999-2000 and of the change from 1.1.2000 was not considered or analysed. Appeal partly allowed and the matter remitted to the Tribunal to determine (i) whether 'Rasna' is a 'beverage' for AY 1997-98, and (ii) the effect of Entries 124A and 141 vis-à-vis Entry 97 for AY 1999-2000.

(2008] 11 S.C.R. 355

..,

MIS. PIOMA INDUSTRIES ETC. ETC.

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STATE OF KERALA (Civil Appeal No. 4639 of 2008)

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.._ "*-

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JULY 25, 2008

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[DR. ARIJIT PASYAT AND P. SATHASIVAM, JJ.]

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Kera/a General Sa/es Tax Act, 1963 - Schedule I, Entries 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.

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The question for consideration was whether 'Rasna' is taxable as 'beverage' or 'non-alcoholic drink'. The authorities and courts below had held that the same was a E 'non-alcoholic drink'. Hence the present appeal.

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Partly allowing the appeal, the Court

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HELD: The assessee had taken the stand that the article in question was 'vegetative food preparation' and 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 'beverage' has to be factually decided. Similarly, the effect of the introduction of the Entries 124A and 141 in the Assessment year 1999-2000 has not been considered. Therefore, the effect of the change from 1.1.2000 has also not

355

356

SUPREME COURT REPORTS

[2008] 11 S.C.R.

A been considered and has not been analysed. In the circumstances, the matter is remitted to the Tribunal to examine 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 AssessB^{ment year 1999-2000. [Paras 7 and 8] [359-H; 360-A-C]}

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CIVILAPPELLATE JURISDICTION: CivilAppealNo. 4639 of.2008

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From the final Judgment ~nd Order dated 3.8.2005 of the c^{High, Court of Kerala at ErnakulaminST.Rev.Nos.271and} .353 of 2003 and 320 of 2005

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Mathai M. Paikeday, Shishir Pinaki, Amit Singh and Sanjay · Jain for the Appellant.

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T.L.V. Iyer, P.V. Dinesh and T.P. Sindhu for the·R_esponJD dent.

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The Judgment of the Court was delivered by·

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· DR. ·ARIJIT.'PASAYAT, J. 1. Leave granted.

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E 2. Challenge in this appeal is to the judgment of a Division

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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 199798 and 1999-2000. The dispute lies within a very narrow comF. pass.

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The question is whether "Rasna" is taxable as a 'beverage' 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 ·be taxed as 'non-Alcoholic drinl<'. ·

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I>.,,, ...

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According to the learned counsel for the appellants, H 'Rasna' is a powder which is nothing but a soft drink concen-

¶39

357

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, ·~

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· M/S. PIOMA INDUSTRIES ETC. v. STATE OF KERALA [DR. ARIJIT PASAYAT, J.]

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... -1.

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trate and cannot be taken to be as 'non-alcqholic drink'. It is nothing but a fruit in a powder form and a vegetative food preparation. 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.

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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'.

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¶46

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Entries for the two relevant assessment years read as . c follows:

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In the year 1997-98

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IEntry ,No.	Detailsofgoods	Pointoflevy	Rateof tax	D
56.	Food including vegetative or animal preparations soldin airtight containers and food colours, essencesofall kinds and powders or tablets used for making food preparations or beverages	At the point of first saleinthe State bya dealer who is liable to tax un- der Section 5 ·	12.5%	·E
87.	Non-alcoholic drinks, squashes, saucesAeratdwaters, mineral watr.beverages Horlicks, Boost,Boumvita,Complan,Glu- case- D,Glucovita and similar items whetherbottledor canned or packed Explanation : Powders, tablets and concentrates used for the preparationofnon alcoholic drinks, shall whether or not they are bottled or cannedbe liable to tax under this entry.	Do	20%	F G H

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358

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SUPREME COURT REPORTS

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[2008} 11 S.C.R.

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A During 1998 - 99

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B '	'56. .	Food including vegetative or animal preparation·s soldih airtight containers and food colours, essencesofall kinds and powders or tablets used for making food preparations Qrbeverages ·	At the point of first saleinthe ·stateby a dealer who is liabletotax un- der Section 5	12.5%
c D ·E	87.	Non-alcoholic drinks, squashes, saucesAer~ted waters, mineral water, bever- ages Horlicks, Boost, Bournvita, Complan, Glucose- D,.Glucovita and similar items whether bottled or canned or 'packed Explanation : Powders, tab- lets and concentrates used for the preparation of non alco- holic drinks, shafl whether or not they are bottled or canned be liable to tax under this en- try.	Do	20% '.
F	D	uring 1999-2000 tiil 31.12.19	99
G	87.	Food including vegetative or animal preparations soldin .airtight containers and food colours, essences of all kinds and powders or tablets used for making food preparations or beverages	Do	25%
H	124A	·squashes, sauces soda,min:- 'eralwaterHorlicks,Boost Bournvita, Complain,	Do	20%

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MIS. PIOMA INDUSTRIES ETC. v. STATE ·359 OF KERALA [DR. ARIJIT PASAYAT, J.]

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	Glucose-D,Glucovitaand similar items whether or not bottled canned or packed Ex- planation: powders, tablets, granules and concentrates · used for the preparationof beverages shall, whether or not they are bottled or canned, be liable to tax under this en- try.	A B
.	From 1-1-2000	c
97-	Non alcoholic drinks whether or not bottled or canned or packed Explanation _ Pow- ders, tablets, granules and concentratesusedforthe prepar~tionofnon-alcoholic drinks, shall whether or not they are qottled or canned be liable to tax under this entry.	Do 25% D E
141	Squashes, sauces, fruitjuice, fruit pulp, soda, mineral water, Horlicks, Boost, Bournvita Complan, Glucose-D, Glucovita and similar items whether or not bottled canned or packed. Explanation-Pow- ders, tablets Granules and concentratesusedforthe preparationofbeverages shall, whether or not they are bottled or canned, be liable to tax under this entry.	Do 20% F G

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It appears that assessee had taken the stand that the

[2008] 11 S.C.R.

360

SUPREME COURT REPORTS

¶62

A article in question was vegetative food preparation and in the alternative it was a beverage.

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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 ad 97 relate 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 factuallrdcided. 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 D considered and has not been analysed. In the circumstances, we remitthe matter to the Tribunal to examine the following:

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. 1. Whether 'Rasna' can be treated as beverage for the assessment year 1997-98.

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E ' 2. To ·examine the effect of the Entries 124A and 141 visa-vis ·Entry 97 for the Assessmen.t year 1999-2000.

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The appeal is allowed to the aforesaid extent.

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K.K.T.

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Appeal partly allowed.

M/S. Pioma Industries etc. etc. v. State of Kerala

Case brief

What is this about?

What did the court decide?

M/S. Pioma Industries etc. etc. v. State of Kerala

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

Coram

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