MIS. PIOMA INDUSTRIES ETC. ETC v. STATE OF KERALA

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- 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 G 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- dent. JD 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- pass. F.

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 ·be taxed as 'non-Alcoholic drinl<'. ·

4. According to the learned counsel for the appellants, 'Rasna' is a powder which is nothing but a soft drink concen- H I>- ... .,,, · M/S. PIOMA INDUSTRIES ETC. v. STATE OF KERALA [DR. ARIJIT PASAYAT, J.] 357 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 , ·~

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 · or beverages 20%

87. Non-alcoholic drinks, squashes, Do saucesAerat~d waters, mineral wat~r. beverages Horlicks, Boost, Boumvita, Complan, Glu- case- 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. D ·E F G 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 and powders or tablets used liable to tax un- for making food preparations der Section 5 Qr beverages ·

87. Non-alcoholic drinks, Do squashes, sauces Aer~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. During 1999-2000 tiil 31.12.1999

87. Food including vegetative or Do animal preparations sold in .airtight containers and food colours, essences of all kinds and powders or tablets used for making food preparations or beverages 124A ·squashes, sauces soda, min:- Do 'eral water Horlicks, Boost Bournvita, Complain, 20% '. 25% 20% B ' c D ·E F G H MIS. PIOMA INDUSTRIES ETC. v. STATE OF KERALA [DR. ARIJIT PASAYAT, J.] ·359 Glucose-D, Glucovita and similar items whether or not bottled canned or packed Ex- planation: 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 en- try. . From 1-1-2000 97- Non alcoholic drinks whether Do or not bottled or canned or packed Explanation _ Pow- ders, tablets, granules and 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. 141 Squashes, sauces, fruitjuice, Do 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 concentrates used for the preparation of beverages shall, whether or not they are bottled or canned, be liable to tax under this entry. A B c D E F G 25% 20%

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.