2014 (5) TMI 1188 - HC - VAT and Sales Tax

Classification of goods - flavoured milk - whether can be classified as soft drinks or not? - HELD THAT - Circular dated 27.11.2002 to held that Badam Milk will remain to be milk and mere addition of some powder will not change its nature and that is how concurrent findings has been recorded. The circular of Commissioner dated 27.11.2002 is binding upon department - revision dismissed - decided against Revenue.

Summary

Issues:

1. Interpretation of whether flavoured milk should be treated as a soft drink for taxation purposes.

Analysis:

The judgment by Sudhir Agarwal, J., addressed the issue of whether flavoured milk should be considered a soft drink for tax purposes. The question of law raised was whether the Trade Tax Tribunal was justified in not categorizing flavoured milk as a soft drink, especially when previous judgments had classified it as such. The Tribunal based its decision on a circular dated 27.11.2002, asserting that the addition of powder to milk does not change its fundamental nature. This decision was supported by a Division Bench judgment in M/s Super Fine Processors Pvt. Ltd. Vs. State of U.P. The court found the Tribunal's reliance on the circular to be valid and binding, leading to the conclusion that flavoured milk should be taxed as a milk product rather than a soft drink. Consequently, the question posed was answered against the Revenue, and the revision was dismissed.