LexM/S. PARLE AGRO (P) LTD. versus COMMISSIONER OF COMMERCIAL TAXES, TRIVANDRUM
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A B . [2017] 5 S.C.R. 30 MIS. PARLE A6RO (P) LTD. v. COMMISSIONER OF COMMERCIAL TAXES, TR:IVANDRUM (Civil Appeal Nos. 6468-69 of 2017) MAY09,2017 (A. K. SIKRI AND ASHOK BHUSHAN, JJ.) Kera/a Value Added Tax Act, ¥003: ! ss.6(l)(a) and 6(l)(d) - Classification of the procJuct 'Appy C Fizz'~. Whether u/s.6(1)(a)fas aerated branded soft drink' invoking tax liability @ 20%) or under Entry 71 Item 5 of Notificption issued uls.6(l)(d) (as 'fruit juice based drink' invoking tax liability @ 12.5% - Held: Assessee has succesSJully proved by relevant scientific and technical materials that th(! product 'Appy fizz' is a commodity which is fully covered by Item 5 of Entry 71 as amended D by S.R.O. No.119 o/2002 with tax liability@ 12.5% (now@ 14.5%). Interpretation a/Statutes: -, 'Rules of interpretation - Common parlance test or commercial t~st -Applicability of - To interpret scientific and.,teclmica/ words - E Held: While interpreting scientific and technica/'words, cornmo_n parlance test/Commercial test is not the only test and technical evidence needs to be looked into. · . Evidence: Onus to prove that particular goods fall in particular tariff F item is on the Revenue - Tax/Taxation. Principle: Principle of 'Noscitur a Sociis' - Applicability of " Allowing appeal Nos. 6468-69 of 2017, dismissing appeal G · No. 6470 of .2017 and disposing of appeal N()s. 6471-72 of 2017, the Court · · "€ivil Appeal Nos. 6468-69 of 2017: HELD:l.1 All goods enumerated in Section 6(l)(a) ofKerala · · Value Added Tax Act, 2003, by the Legislature itself indicates H that higher rate of tax has been fixed for those goods which are 30 M/S. ~ARLE AGRO (P) LTD. v. COMMISSIONER OF 31 COMMERCI'AL TAXES - - harmful for environment and health. Aerated branded soft drinks, A excluding soda is alSo in the company of the above goods - described in Section 6(1)(a). Section 6(1)(a) also r:.ef~rs to Schedule I, Schedule II and Schedule III. ~ax in -S~hedule I is - exempted and rate in Schedule II is 1 % whereas rate of tax in Schedule III is 5% in contrast to legislative policy in fastening B tax liability at very high level on goods under Section 6(l)(a) is thus clear and categorical. Those goods which are not congenial _ to health and environment are charged with higher tax level, which is the purpose and object clear from the legislative s'cheme. [Para 26] [50-))-F.] - - 1.2 Section 6(l(d) empowers the ·state to notify a list of goods which are taxable at the rate of 12.5% (at present at 14.5%) which does not fall under cfau-se (a) and.(c). The delegated: legislative power of issuing 'notification to the St~te Government is thus restricted and can be exercised only when goods do not c fall under Section 6(1)(a) or Section 6(l)(c). The State of Kerala - D exercising its delegated legislative power has issued notification under Section 6(1)(d). [Para 27] [50-G-~] ' . - 1.3 The aerated branded soft drinks, excluding soda were aiways covered under Sectio-n 6(l)(a) and.prfor to 1" April,.2007 it bears HSN Code 2201.10.10. Entry 11 Item 4 of the Notification E also reads as "fruit pulp or fruit juice based drinks with_ HSN Code 2202.90.20". When fruit juice based drinks were·covered \under Entry 71, the State Government knew that fruit juice based drinks were not covered by Section 6(l)(a) .. Applicability of t~e . power of State to issue notification under Section 6(1)(d) arises. only when goods were not covered by Section 6(1)(a). Fruit juice F based drinks, thus, were never treated as -'aerated branded soft ' drinks' which wa.s the understanding of State of Kerala while issuing notification under Section-6(l(d). Had fruit juice based drinks we,re also to be covered by aerated branded soft drinks, there was no occasion for subo,rdinate legislative authority, i;e., G the State Government, to ineiude sucll products in notification . under Section 6(1)(d). [Para 29) _[Sl-F-H, 52-A) . - 1.4 A bare perusal of Entry 71 as substitutecl by S.R.O.No.119 of 2oos; indicates that the Entry covers non- . alcoholic' bever!lges and their powders, concentrates and tablets H - \ 32 SUPREME COURT REPORTS [2017] 5 S.C.R. A in any form including - Item No.2 contains fruit juice, fruit concentrates, fruit squash, fruit syrup and pulp and fruit cordial. Soft drinks other than aerated branded soft drinks are included in Item No.3. He.alth drinks of all varieties are included in Item No
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