1996 (11) TMI 439 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of "falooda" as a milk product or cooked food for sales tax assessment under the Kerala General Sales Tax Act, 1963.

Analysis:
The case involved a dispute regarding the classification of "falooda" for sales tax assessment purposes under the Kerala General Sales Tax Act, 1963. The primary issue was whether "falooda" should be considered a milk product or a cooked food, specifically falling under entry 122 or entry 57 of the Act for the assessment year 1991-92.

The assessing authority initially classified "falooda" as a milk product, subject to tax at 8%, based on entry 122 of the Act. The authority noted that the assessee did not object to this classification during the hearing, leading to a presumption of agreement with the assessment.

The first appellate authority, however, examined the preparation process of "falooda" and concluded that it should be considered a cooked food, falling under entry 57 of the Act. The authority highlighted the ingredients and preparation method of "falooda" to support this classification.

Subsequently, the Kerala Sales Tax Appellate Tribunal overturned the initial classification, determining that "falooda" did not qualify as a milk product. The Tribunal directed the assessing authority to re-compute the tax liability based on this determination.

Upon further review, the High Court analyzed the preparation process of "falooda" and the relevant entries in the Act. The Court emphasized that the inclusive nature of entry 122 encompassed specific milk products, excluding items like "falooda." Therefore, the Court concurred with the Tribunal's finding that "falooda" should be classified as a cooked food, not a milk product.

Ultimately, the High Court modified the Tribunal's order, directing the assessing authority to consider the tax liability of "falooda" as a cooked food, in line with entry 57 of the Act. The petition was allowed, and the tax revision case was disposed of accordingly.