Case Note & Summary
The Supreme Court allowed appeals filed by Appellants challenging the classification of their product under the Uttar Pradesh Value Added Tax Act, 2008 (UPVAT Act) -- The appellant had classified the product as 'fruit drink' under Entry 103 of Schedule II attracting 4% tax for the period 01.01.2008 to 31.03.2012 -- The revenue authorities classified it under residuary entry in Schedule V attracting 12.5% tax -- The High Court upheld the revenue's classification -- The Supreme Court examined statutory definitions under the Central Excise Tariff Act, 1985 and Fruit Products Order, 1955 which defined 'sharbat' as containing not less than 10% fruit juice -- The Court applied the common parlance test and essential character test, holding that fruit content imparted the essential character to the product -- The Court found that the revenue failed to discharge the burden of proving classification under residuary entry -- The impugned judgments were set aside and the product was held to be classifiable as 'fruit drink' under Entry 103 of Schedule II of the UPVAT Act
Headnote
The Supreme Court allowed the appeals filed by Appellants against the judgments of the High Court of Judicature at Allahabad -- The dispute pertained to the classification of the product for Value Added Tax purposes under the Uttar Pradesh Value Added Tax Act, 2008 (UPVAT Act) -- The appellant had classified the product as 'fruit drink' under Entry 103 of Schedule II attracting 4% tax -- The revenue authorities classified it under residuary entry in Schedule V attracting 12.5% tax -- The High Court upheld the revenue's classification -- The Supreme Court held that the product qualified as 'fruit drink' under Entry 103 based on statutory definitions, common parlance test, and essential character test -- The Court emphasized that the fruit content imparted the essential character to the product despite sugar syrup being the predominant ingredient -- The burden was on revenue to prove classification under residuary entry which was not discharged -- The impugned judgments were set aside and the appeals were allowed
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Issue of Consideration: Whether the product 'Sharbat Rooh Afza' manufactured by the appellant qualifies as 'fruit drink' under Entry 103 of Schedule II of the Uttar Pradesh Value Added Tax Act, 2008 (UPVAT Act) or falls under the residuary entry in Schedule V
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Final Decision
The Supreme Court allowed the appeals -- Set aside the impugned judgments of the High Court -- Held that 'Appellants Product' qualifies as 'fruit drink' under Entry 103 of Schedule II of the Uttar Pradesh Value Added Tax Act, 2008 (UPVAT Act) -- Directed classification under Entry 103 attracting 4% tax
