2024 (10) TMI 499 - HC - VAT / Sales Tax

Classification of goods categorized as vitamins and minerals pre-mix - to be categorised in the category of Entry 29 of Schedule II of the Act 2008 under the heading chemicals and to be taxed @ 4% or under the Entry 89 under the heading ores and minerals taxable @ 12.5%? - HELD THAT - Section 4 of the Act 2008 which a charging section clearly states that the tax payable on sale of goods under this Act shall be levied and paid. accordingly tax is levied on the goods and not individually on the raw material from which the goods are prepared. Undisputedly items given in Entry 29 are not the goods which are being sought to be taxed in the present case but it is the finished product which is vitamins and minerals pre-mix - this Court is unable to accept contention of the revisionist that goods classified as vitamins and minerals pre-mix would fall under the category chemicals . Whether vitamins and minerals pre-mix would fall under the category drugs and medicines as provided under Entry 41? - HELD THAT - Entry 41 also specifically in its contents excludes medicated soap shampoo antiseptic cream face cream massage cream eye gel and hair oil etc. This entry very clearly defines the products which are used for alleviation of any disease or its symptoms - vitamins and minerals pre-mix does not fall in the category of drugs and medicines nor has any material adduced either before the authorities below or before this Court that it would qualify for being classified as drugs and medicines and accordingly there is no reason to accept the contention of the revisionist that vitamins and minerals pre-mix would fall under the category of drugs and medicines . Inclusion of vitamins and minerals pre-mix under ores and minerals as defined in Entry 89 of Schedule II of the Act 2008 - HELD THAT - The said entry provides only for raw oars and minerals without mentioning vitamins and minerals pre-mix falling under the said entry and hence it is clear that vitamins and minerals pre-mix would not fall under the category of oars and minerals . This Court does not find any infirmity in the order passed by the Additional Commissioner or the Tribunal that vitamins and minerals pre-mix would be termed as unclassified item and liable to be taxed as such - the revision is dismissed.

Summary

Issues:
Classification of "vitamins and minerals pre-mix" under the U.P. Value Added Tax Act, 2008.

Detailed Analysis:

1. The revisionist challenged the Full Bench of the Commercial Tax Tribunal's order regarding the classification of "vitamins and minerals pre-mix" under the U.P. Value Added Tax Act, 2008. The controversy arose when the Commissioner, Commercial Tax categorized the product as "unclassified goods" taxed at 12.5%.

2. The revisionist argued that the product should be classified as "chemicals" under Entry 29 of the Act, 2008, as it contains certain chemicals. However, the court noted that the tax is levied on the finished product, not its raw materials, and rejected this argument.

3. The revisionist also contended that the product could be classified as "drugs and medicines" under Entry 41 of the Act, 2008. The court analyzed various dictionary definitions of "drugs" and "medicines" to conclude that the product did not qualify under this category.

4. Lastly, the revisionist suggested that the product could fall under "ores and minerals" as per Entry 89 of the Act, 2008. The court clarified that this entry only covers raw ores and minerals, excluding "vitamins and minerals pre-mix."

5. The court upheld the Tribunal's decision that "vitamins and minerals pre-mix" should be classified as an unclassified item and taxed accordingly at 12.5%. The revision was dismissed, and the judgment favored the revenue.

In conclusion, the court's detailed analysis of the classification of "vitamins and minerals pre-mix" under the U.P. Value Added Tax Act, 2008, emphasized that the product did not fit under the categories of "chemicals," "drugs and medicines," or "ores and minerals," leading to its classification as an unclassified item for taxation purposes.