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TMI Blog2015 (1) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... OURT OF INDIA] in the decisions referred, with regard to the manner in which the clarification of the products is to be done and the decision of Hon'ble Division Bench of this Court in H.M.M Limited (1990 (10) TMI 331 - MADRAS HIGH COURT) confirmed by the Hon'ble Supreme Court and then take decision on merits and in accordance with law after affording an opportunity of personal hearing. Further the petitioner has placed reliance on the decisions of Authority for Clarification and Advance Ruling, where they have clarified regarding the rate of tax for milk based products and held that product is a milk product since it is pre-dominently milk In the light of the above, the Writ Petitions are allowed and the impugned clarification is quashed and the 2nd respondent is directed to place the matter before the Authority for Clarification and Advance Ruling - decided in favour of petitioners. - W.P.No.5115 of 2008 and M.P.Nos.1 and 2 of 2008 and M.P.No.1 of 2009 and W.P.No.6035 and 6036 of 2008 and M.P.Nos.1 and 1 of 2008 - - - Dated:- 22-12-2014 - T. S. Sivagnanam,JJ. For the Petitioners : Mr. C. Natarajan Senior Counsel for Mr. N. Prasad For the Respondents : Mr. Kanman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... caramel flavor and 56.4% by weight in chocolate flavour. In terms of value in the finished product, it constitutes 76.11% and 69.8% respectively. The rest are construed with malt and other ingredients. Further the goods are registered as milk product as defined under the Milk and Milk Products ' Order 1992 and under Section 2(g) of the Control Order, Milk Product and Women's Horlicks is registered under the clause 5 of the Control Order and Certificate to that effect has been issued by the Government of India vide Certificate dated 13.08.2005. 7.It is the further case of the petitioner that the Hon'ble Division Bench of this Court held that Horlicks is a milk product in the case of H.M.M. Limited Vs. Deputy Commercial Tax Officer reported in 79 STC 421 (Madras), which judgment was confirmed by the Hon'ble Supreme Court in Special Leave to Appeal in S.L.P. Nos.15973-74/91 dated 23.08.1993. The Hon'ble Division Bench in the said decision held that goods to be milk food or milk product because milk predominated by weight and value. The Hon'ble Division Bench of this Court has also referred to the fact that the goods were all along classified as milk product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Division bench of this Court in the case of H.M.M Limited stated supra arrived at a conclusion on the basis of material evidence putforth by H.M.M. Limited, the overall input weight and costs in the manufacture of Horlicks after mixing, evaporation, drying and grinding. 10.It is further submitted that in the case of Women's Horlicks milk constitute only 20 gm out of 100 gm as seen from the plastic jar of the product in question which is about 20% and all product having milk as a component cannot be called milk products and this product contains only 20% milk and hence cannot be classified as a milk product . Therefore the respondents seek to justify the clarification issued. 11.After hearing the learned counsel for the petitioner and the learned Additional Government Pleader for respondents and after perusing the materials placed before this Court, two issues arises for consideration in these Writ petitions, namely: - (i) Whether the product, Women's Horlicks is to be taxed at 4% under Part B of the First Schedule or it should be taxed at 12.5% / 14.45% by applying the residuary entry. (ii) Whether the impugned clarification is arbitrary for assig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Notification G.O.P.No.253 dated 17th March, 1986 was promulgated reducing the tax from 10 per cent to 4 percent in respect of milk foods that the department has changed its approach purely with a view to prevent the products like Horlicks from getting the benefit of reduced rate of tax. We may also refer to a series of letters from the side of the Revenue indicating that products like Horlicks are only milk foods. The Commissioner of Commercial Taxes in his letter dated 29th April, 1986 says as follows:- 'Viva' is a milk food taxable at the reduced rate of 4 per cent single point with effect from 17th March, 1986. The copy of the Board's Proceedings Rt. 33/72 dated 6th January, 1972 is not furnished, as it is not readily available 14.The above referred decision has been confirmed by the Hon'ble Supreme Court by Judgment dated 23.08.1993 in Special Leave Appeals in S.L.P.Nos.15973 and 15974 of 1991, wherein the Hon'ble Supreme Court has held as follows:- We have heard Sri A.K.Ganguli, learned senior counsel for the State of Tamilnadu and Sri Soli J.Sorabjee, learned senior counsel for the first respondent. The question before the High Court was w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be worthwhile to refer to the decision in the case of Commissioner of C.Ex., Bhubaneswar-I vs. Champdany Industries Limited 2009 (241) E.L.T. 481 (S.C) wherein the question arose whether the carpets manufactured by the respondent-company are classifiable as Jute products . The Hon'ble Supreme Court pointed out that since the goods admittedly classified under Chapter 57 ibid and consisting of more than two or more textile materials and hence, to be classified based on textile material which predominates by weight over other single textile material and jute being predominant by weight in impugned goods and classifiable as jute carpets and nothing else. In the said decision, the Hon'ble Supreme Court while considering the question as to when the residuary entry could be applied ignoring a specific entry, pointed out that after referring to the decision of M/s Bharat Forge and Press Industries (P) Ltd., vs. Collector of Central Excise, Baroda, Gujarat (1990) 1 SCC 532 that the residuary entry should be applied only when the goods cannot be brought under the various specific entries in the tariff, and the same was followed by the Division Bench of this Court in Canon India Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fording an opportunity of personal hearing. Further the petitioner has placed reliance on the decisions of Authority for Clarification and Advance Ruling, where they have clarified regarding the rate of tax for milk based products and held that product is a milk product since it is pre-dominently milk. 17.It is pointed out by the learned counsel for the petitioner that with regard to the clarification regarding rate of tax, now the matter is being placed before the Authority called as Authority for Clarification and Advance Ruling constituted under Section 48A of the Tamilnadu Value Added Tax Act, 2006. 18.In the light of the above, the Writ Petitions are allowed and the impugned clarification is quashed and the 2nd respondent is directed to place the matter before the Authority for Clarification and Advance Ruling and the petitioner is directed to file an application before the said Authority requesting for clarification with all supportive records and when such application is filed, the said Authority shall afford opportunity of personal hearing to the petitioner and decide the matter on merits and in accordance with law and pass a reasoned order taking note of the findings ..... 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