LexCOMMISSIONER OF TRADE TAX, U.P. versus ASSOCIATED DISTRIBUTORS LTD.
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[2008] 7 S.C.R. 695 COMMISSIONER OF TRADE TAX, U.P. A v. ASSOCIATED DISTRIBUTORS LTD. (Civil Appeal No. 6636 of 2002) MAY 5, 2008 B ,. [ASHOK BHAN AND DALVEER BHANDARI, JJ.) Uttar Pradesh Sales Tax Act - Rate of tax - On 'Bubble gum' - HELD.Rate of Tax would be at 10% as unclassified and non-scheduled item and not at the rate of 6. 25% as a c sweetmeat (mithai) - 'Bubble-gum' cannot be considered as 'mithai' in the State of Uttar Pradesh - Uttar Pradesh Government Notifications No. Vya Ka-2-1225/Eleven dated 31.3.1992 and No. VYa Ka-2-3403/Eleven dated 1.10.94. The question for consideration in the present appeals D is rate of tax applicable on the sales of Bubble-gum. Appellant-Revenue imposed the tax at the rate of 10% inclusive of surcharge as an unclassified and non- schedule item. Respondent-assessee challenged the ~ same. Appellate Court taxed it at the rate of 6.25%. In E second appeal, Sales Tax Tribunal concluded that Bubble- gum is neit.her a sweatmeat (Mithai) nor confectionary, hence tax is liable to be paid as an unclassified item. High Court, in revision, reversed the judgment of the Tribunal. Hence the present appeal. F Allowing the appeal, the Court " HELD: 1.1 By no stretch of imagination, can 'Bubble- gum' be considered as 'mithai' in the State of Uttar Pradesh. Consequently, 'Bubble-gum' is taxable as an G unclassified good. The notification issued under UP Sales Tax Act, the mithai (sweetmeat), cooked food, namkin etc. are under one entry, but it does not mean that namkin and cooked food is sweetmeat (mithai). 695 H 696 SUPREME COURT REPORTS [2008] 7 S.C.R. A (Paras 12 and 21) [701-D; 702-G; 703-A] 1.2 Bubble-gum in the common parlance cannot be construed as Mithai (sweetmeat). In common parlance, even items of confectionery will not be construed as B sweetmeat (mithai). In fact, Bubble gum is not an item for eating. It is kept in the mouth and after chewing the same ' "" is thrown out. In fact, it is used as a 'mouth freshener'. It is not made only of sugar. It contains gum base, vexes etc. along with sugar. (Para 8) [700-A, B, C] c 1.3 The High Court while coming to the finding that the Bubble-gum cannot be treated as a 'sweetmeat' but it is certainly an item of confectionery gave no reasons for its finding. The respondent did not give any break up of the ingredients of 'Bubble-gum'. It was never the case of D the respondent that 'Bubble-gum' was a sugar product. Confectionery is not even mentioned in the notification issued by Government of Uttar Pradesh. The High Court ought to have properly comprehended the object of the Notification. In the facts and circumstances, the High E Court should have applied common parlance test to determine proper categorization of Bubble-gum. (Paras 14 and 15) [701-E, F, G, H; 702-A] ., Nutrine Chewing Gum Products Co. Pvt. Ltd., Arya Nagar, Lucknow STI 1985 21 - relied on. F Pappu Sweets and Biscuits and Anr. v. Commissioner of Trade Tax, UP, Lucknow 1998 (7) SCC 228; Annapurna Biscuit Manufacturing Co. Ltd. v State of UP 1975 UPTC 620; Gum India Ltd. Kanpur v Commissioner of Trade Tax 1996 STD Tribunal 124 - referred to. G CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6636 of 2002. From the Judgment and Order dated 9.11.2001 of the High Court of Judicature at Allahabad in TTR No. 656/2001. H ) COMMNR. OF TRADE TAX, U.P. v. ASSOCIATED 697 DISTRIBUTORS LTD. [DALVEER BHANDARI, J.] WITH Civil Appeal No. 3270, 3271 of 2008 and Civil Appeal No. 2112 of 2007. Aarohi Bhalla, Manoj Kr. Dwivedi (for G. Venkateswara Rao). for the Appellant. S.K. Bagaria, Kavin Gulati, Rashmi Singh, Avnish, Pandey (For Kamlendra Mishra) for the Respondents In C.A. No. 6636/ 2002. Dhruv Aggarwal, Praveen Kumar for lnterverner in C.A. No. 6636/2002. The Judgment of the Court was delivered by DALVEER BHANDARI, J. 1. Leave granted in the Special Leave Petitions. 2. These appeals are directed against the judgment and order dated 09.11.2001 of the High Court of Judicature at Allahabad passed in Trade Tax Revision No.656 of 2001. 3. In these appeals, a common question of law arises, therefore, for the sake of convenience the facts of only Civil Appeal No.6636 of 2002 are recapitulated. 4. The issue involved in these appeals is confined to the rate of tax applicable on the sales of Bubble-gum. According to the appellant, Bubble-gum is taxable as an unclassified good and would attract the d
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