2009 (3) TMI 958 - HC - VAT and Sales Tax

Summary

Issues involved:
1. Rate of tax on sambar powder, meat masala powder, rasam mix, and pickle mix powder under entry 32 of the Kerala General Sales Tax Act, 1963.
2. Rate of tax on turmeric powder under entry 138 and the impact of the Explanation introduced by the Finance Act, 2000.

Analysis:

Issue 1: Rate of tax on sambar powder, meat masala powder, rasam mix, and pickle mix powder under entry 32:
The revision filed by the assessee pertains to the rate of tax on these items. The assessee claimed that they should be taxed at four per cent under entry 32 of the Act, which covers chillies, coriander seeds, curry powder, spices powder, and garlic. The first appellate authority allowed the claim, but the Tribunal reversed the decision. The High Court analyzed the nature of the items and found that sambar powder, meat masala powder, and rasam mix powder are used for making curries, falling under the definition of "curry powder" in entry 32. Regarding pickle mix powder, the court held that even though pickle may not be commonly referred to as curry, it is consumed as a curry accompaniment, making the powder used for making pickle classifiable as curry powder. Additionally, since pickle mix contains various spices, it can also be classified as spice powder under entry 32. Therefore, the court ruled in favor of the assessee, directing assessment at a rate of four per cent under entry 32.

Issue 2: Rate of tax on turmeric powder under entry 138 and the impact of the Explanation introduced by the Finance Act, 2000:
The next question raised was the tax rate on turmeric powder. Turmeric was initially covered under entry 138 taxable at four per cent. The Finance Act, 2000 introduced an Explanation bringing turmeric powder under the renumbered entry 159. The petitioner argued that the Explanation was clarificatory, and turmeric powder should be considered part of the original entry covering turmeric. The court agreed, stating that since different forms of turmeric were not specified, it could be inferred that all forms of turmeric, including powder, were included. The court emphasized that turmeric powder, being a form of spice, should not be assessed under the residuary entry but rather under entry 32 as a spice powder. Considering entry 32 as generally exhaustive for spice powders, the court held that turmeric powder should be taxed at four per cent under entry 32. Therefore, the court ruled in favor of the assessee, directing assessment of turmeric powder at a rate of four per cent under entry 32.

In conclusion, the High Court allowed the revision filed by the petitioner, overturning the Tribunal's decision and instructing the assessing officer to tax the mentioned products at a rate of four per cent under the relevant entries of the Kerala General Sales Tax Act, 1963.