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Deputy Commissioner Of Sales Tax (Law) v. V.P Sukumaran
Factual and Procedural Background
The Revenue filed this Tax Revision against an assessee under the Kerala General Sales Tax (K.G.S.T.) Act concerning assessment year 1978-1979. The assessing authority taxed the sales turnover of "Rasna" at 10% under entry 25‑P of the First Schedule (pre‑amendment by Act 19 of 1980), rejecting the assessee's plea that "Rasna" did not fall under entry 25‑P. An appeal to the Appellate Assistant Commissioner was dismissed. On second appeal the Sales Tax Appellate Tribunal, by order dated 4 June 1987, held that "Rasna" is a soft drink concentrate — a raw material for preparing soft drinks — and therefore not a "drink" or "beverage" within entry 25‑P, and taxable only at the general rate. The Revenue seeks revision of that Tribunal decision (T.A. No. 722 of 1983).
Legal Issues Presented
- Whether "Rasna" is a "non‑alcoholic drink or beverage, bottled or canned and sold under brand name" within entry 25‑P of the First Schedule of the K.G.S.T. Act (pre‑Act 19 of 1980 amendment) and thus taxable at the 10% rate specified thereunder.
Arguments of the Parties
Revenue's Arguments
- The sole plea advanced was that "Rasna" is a non‑alcoholic drink or beverage and therefore falls within entry 25‑P of the First Schedule and is taxable at the 10% rate.
Assessee's Arguments
- The assessee contended that "Rasna" does not fall under entry 25‑P; the Appellate Tribunal found it to be a soft drink concentrate and a raw material for preparing drinks rather than a drink or beverage itself.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The court accepted the Appellate Tribunal as the final fact‑finding authority, which had determined that "Rasna" sold by the assessee is a soft drink concentrate and a raw material for preparing soft drinks, not a drink or beverage per se. The court examined entry 25‑P of the First Schedule (pre‑Act 19 of 1980), which pertains to "Non‑alcoholic drinks and beverages, bottled or canned and sold under brand name" taxable at 10% at the point of first sale in the State by a liable dealer. To interpret "drink" and "beverage" the court relied on dictionary definitions cited in the opinion (Chambers 20th Century Dictionary): "beverage" as "Any liquid for drinking..." and "drink" as "To swallow as a liquid..." The court reasoned that (a) "Rasna" is a concentrate and not a liquid, (b) there was no material showing it was bottled or canned and sold under a brand name as required by entry 25‑P, and (c) therefore "Rasna" does not fall within the expressions "drinks" or "beverages" in entry 25‑P. Applying these findings to the statutory text, the court concluded the Tribunal correctly held that "Rasna" is not taxable under entry 25‑P and is instead taxable only at the general rate.
Holding and Implications
Revision dismissed; Tribunal decision upheld.
Direct consequences: The Revenue's revision is dismissed and the Appellate Tribunal's finding that "Rasna" is a soft drink concentrate (a raw material) not covered by entry 25‑P is concurred with; "Rasna" is therefore taxable only at the general rate rather than at 10% under entry 25‑P. The opinion does not announce or establish any new legal precedent beyond the application of these facts to the statutory entry.
Paripoornan, J.:— In this Tax Revision Case, the Revenue is the petitioner. The respondent is an assessee under the K.G.S.T Act. He is doing business in bakeries and stationery items we are concerned with the assessment year 1978-1979. The assessing authority taxed the sales turnover of “Rasna” at 10% under entry 25-P of the first schedule of the Kerala General Sates Tax Act, before its amendment by Act 19 of 1980, rejecting the plea of the assessee, that “Rasna” will not come under entry 25-P. The appeal filed before the Appellate Assistant Commissioner was dismissed. In second appeal, the Appellate Tribunal, by order dated 4th June, 1987, held that “Rasna” is only a soft drink concentrate and is not in the nature of drinks as such. It is only a raw material for the preparation of soft drinks and so will not come under entry 25-P of the First Schedule of the K.G.S.T Act and will be taxable only at the general rate. Aggrieved by the aforesaid decision of the Appellate Tribunal, in T.A No. 722 of 1983 dated 4th June, 1987, the Revenue has come up in revision.
2. We heard counsel for the Revenue, Mr. N.N Divakaran Pillai. The sole plea raised before us was that “Rasna” is a non-alcoholic drink or beverage which will come under entry 25P of the First Schedule of the K.G.S.T Act. We are unable to accept the said plea.
3. As the final fact finding authority, the Appellate Tribunal has held that “Rasna” sold by the assessee is only a raw-material for the preparation of soft drinks, that it is a soft drink concentrate and is not in the nature of drinks as such. Entry 25P of the First Schedule of the K.G.S.T Act, 1963, before its amendment by Act 19 of 1980, provides as follows:
(1) (2) (3) (4) “25P. Non-alcoholic drinks and beverages, bottled or canned and sold under brand name. At the point first sale in the State by a dealer who is liable to tax under S. 5. 10.”
4. “Rasna” is not a drink or beverage as such; nor is there any material or evidence to show that it was bottled or canned and sold under the brand name. In Chambers 20th Century Dictionary, new edition, 1983, the word “beverage” is explained as follows:
“Any liquid for drinking, esp. tea, coffee, milk etc. a mixture of cider and water: a drink or drink-money to celebrate an occasion.”
5. The word “drink” is explained as follows:
“To swallow as a liquid: to smoke: to empty, as a glass, bowl, etc: to absorb: to take in through the senses — to swallow a liquid: to take intoxicating liquors to excess.”.
6. Since “Rasna” is only a concentrate and not a liquid, it will not come within the expression “drinks” or “beverages”. Moreover, there is no material to show that “Rasna” sold by the assessee was bottled or canned and sold under brand name.
7. Since “Rasna” is only a soft drink concentrate and not a drink or liquid as such, but only a raw-material for the preparation of soft drinks, we are of the view that “Rasna” will not come under entry 25P of the First Schedule of the K.G.S.T Act, before its amendment by Act 19 of 1980. The Sales Tax Appellate Tribunal was justified in holding so. We concur with the said decision.
8. No interference is called for in this Tax Revision Case. It is dismissed.
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