2015 (8) TMI 1387 - HC - VAT and Sales Tax

Clarification as regards Classification of the drink Appy Fizz - It is the contention of the petitioner that the material that was available before this Court in that case was not sufficient to determine the classification of the item and it is therefore that they have preferred Ext.P13 application before the 2nd respondent for a clarification as regards the classification to be accorded to the item in question - Held that - the interests of justice would be served by directing the 2nd respondent to consider and pass orders on Ext.P13 application for clarification preferred by the petitioner within a period of one month from the date of receipt of a copy of this judgment after hearing the petitioner - petition allowed - decided in favor of petitioner.

Summary

Issues involved: Classification of the drink "Appy Fizz" under the Kerala Value Added Tax Act, challenge to notices issued proposing assessment of sales turnover, and the request for clarification on classification.

Classification of "Appy Fizz": The petitioner, a dealer in fruit juice-based drink products, sought clarification on the classification of "Appy Fizz" under the KVAT Act. The petitioner argued that a previous court decision did not have sufficient material to classify the product accurately. The court directed the 2nd respondent to consider and decide on the clarification application within one month, allowing the petitioner to present supporting material. Pending this decision, the 1st respondent was instructed to halt further proceedings based on the notices issued.

Challenge to Notices: The petitioner challenged notices (Exts.P4 to P12) proposing an assessment of sales turnover, treating "Appy Fizz" as a branded aerated soft drink. The petitioner contended that proceeding without clarifying the classification would prejudice their interests, leading to higher tax assessment. The court directed the 2nd respondent to address the clarification application promptly and instructed the 1st respondent to suspend further actions based on the notices until the clarification decision is communicated.

Request for Clarification: The petitioner filed Ext.P13 application seeking clarification on the classification of "Appy Fizz." The court emphasized the importance of obtaining a clear classification before proceeding with assessments to prevent prejudice to the petitioner. The court ordered the 2nd respondent to review the application, allowing the petitioner to provide supporting material for their classification argument. Until a decision is made and communicated, the 1st respondent was directed to suspend any actions based on the notices issued to the petitioner.

In conclusion, the court disposed of the writ petition by directing the 2nd respondent to decide on the clarification application within a month, allowing the petitioner to present material supporting their classification argument. The 1st respondent was instructed to hold off on further proceedings based on the notices until the clarification decision is made and communicated to the petitioner.