2009 (7) TMI 866 - HC - VAT and Sales Tax

Sale of biscuits - Whether the Tribunal is justified in cancelling respondent s sales tax assessment on the sale of biscuits under brand name under entry 17(i) of the first schedule of the KGST Act and directed assessment treating the biscuits as sold without brand name - Held that - in fact the design, multicolour print and get up of the company s name, namely Ankit along with product name clearly indicate that they are exclusive brand name developed and used by the respondent - However biscuit is a unique consumer product with its taste and flavour varying with the manufacturers making it - Therefore unable to sustain the Tribunal s order - Consequently S.T. Revisions are allowed by reversing the order of the Tribunal and by restoring the assessment - Appeal is dismissed accordingly.

Issues:
1. Justification of canceling sales tax assessment on biscuits sold under a brand name.
2. Interpretation of the distinction between biscuits sold under a brand name and those sold without a brand name.
3. Consideration of brand name registration for assessment purposes.
4. Comparison with a Supreme Court judgment on the sale of medicines.
5. Decision to reverse the Tribunal's order and restore the assessment.

Analysis:
1. The primary issue in this case revolves around the cancellation of the respondent's sales tax assessment on the sale of biscuits under a brand name. The Tribunal had directed assessment treating the biscuits as sold without a brand name, which was challenged by the State in connected revisions.

2. The High Court analyzed the Tribunal's order and found that it was based on a previous order related to the sale of biscuits by another party. However, upon examining the wrappers of the biscuits sold by the respondent, the court determined that the claim of not using a brand name was incorrect. The court noted the design, multicolor print, and company name on the wrappers clearly indicated an exclusive brand name developed and used by the respondent.

3. Regarding the interpretation of the distinction between biscuits sold under a brand name and those sold without a brand name, the court referred to specific entries in the schedule. It highlighted that while some biscuits are sold without any brand name, others are sold under various exclusive brand names, which are covered under separate sub-entries indicating the difference in treatment for assessment purposes.

4. The court also considered the argument regarding brand name registration for assessment purposes. It referred to a previous decision where it was held that registration of a brand name is not necessary for assessing a product under a brand name. The respondent's contention that the company name on the wrappers did not constitute a brand name was rejected by the court based on industry practices and examples of branded products like Britannia and Parle.

5. In comparing the case with a Supreme Court judgment related to the sale of medicines, the court emphasized the unique nature of biscuits as consumer products with taste and flavor variations based on manufacturers. The court concluded that the Tribunal's order was unsustainable and allowed the State's revisions by reversing the Tribunal's order and restoring the assessment. The judgment directed the registry to attach color printouts submitted by the Government Pleader to form part of the judgment.

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