1998 (3) TMI 594 - SCH - VAT and Sales Tax

Whether chillies and chilli powder are different products, both exigible to sales tax? Held that - Appeal dismissed. The sales tax authorities should have placed such material to establish that the chillies underwent some process or manufacture and that the end-product, namely, chilli powder, was recognised by those who dealt in it as being distinct from chillies. They did not do so. Upon this ground alone, therefore, we decline to interfere with the judgments under appeal.

Summary

The Supreme Court of India ruled that chillies and chilli powder may be different products subject to sales tax. The party claiming chilli powder is taxable must provide evidence of a manufacturing process and commercial distinction. In this case, authorities failed to prove the distinction, so the appeals were dismissed.