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TMI Blog2015 (8) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... red under Trade Marks Act, which indicates that either consumer was wilfully confused or falsely fascinated towards brand – Going by reply given by trade mark registry, assesse obtained registration of its brand in respect of pickles to suffer tax at 12.5 per cent – It was not sufficient that there was general registration obtained – Though appellant may be using brand name "Happy" (label), there was no registration for trade mark for product "pickles" – But, to deprive appellant of benefit of concessional rate of taxation (four per cent.) provided in entry 49, appellant must have obtained registration for trade mark in respect of pickles - Decided against the assessee. The product "pickles" marketed by the petitioner though it may be under a brand name, as the same has not been specifically registered under the Trade Marks Act 1999, the view taken by the assessing officer that the pickles cannot be taxed under entry 49 of the Third Schedule is unjustifiable. - Matter remanded back for adjudication in accordance with law. - O. T. Appeal No. 5 of 2012, W. P. (C). No. 12306 of 2012 - - - Dated:- 28-1-2014 - JOSEPH K.M. AND HARILAL K. JJ. Raju Joseph, Senior Advocate, K. P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We heard Shri Raju Joseph, learned senior counsel for the appellant and the learned Government Pleader, Shri Bobby John. The learned senior counsel for the appellant would address the following submissions before us:- Pickles sold by the appellant are not registered under the Trade Marks Act. It is, therefore, taxable only at four per cent. The further argument is that in exhibit P2 which is the revised order of assessment for the year 2006-07 dated April 27, 2012, the assessing officer had proceeded on the basis that the appellant has sold pickles under the brand name Happy label with the emblem registered under the Trade Marks Act, 1999 and repelled the case of the appellant that the appellant has not registered pickles under the Trade Marks Act. It is submitted that the reasoning adopted by the officer is unsustainable, as the vegetable pickles of the appellant is not registered under the Trade Marks Act. Certain other products of the appellant had been registered with the label Happy , but, no registration had been obtained specifically in respect of pickles. Therefore, the appellant is liable to be taxed only at the rate of four per cent. The further argument o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose and intention. As far as entry 84(29) is concerned, he would submit that pickles would not fall within its ambit. He would point out the contents of the pickles marketed by the appellant. The learned counsel for the petitioner sought to draw our attention to the Harmonized Commodity Description and Coding System Volume I published by the Customs Co-operative Council (exhibit P13). Therein, it is stated that pickle and mustard pickle would come under HSN 2001 which reads as follows:- Entry 2001.- Vegetables, fruit, nuts and other edible parts of plants, prepared or preserved by vinegar or acetic acid. Exhibit P14 in the writ petition purports to be a report of the Centre for Taxation Studies submitted to the Union of India. Therein also, it is pointed out that pickles had been included under the heading Vegetables, fruits, nuts and other edible parts of plants, prepared or preserved by vinegar or acetic acid . It is contended that under the Rules of interpretation of the Schedules under the Act, the commodities which are given four digit HSN Code shall include all those commodities coming under the heading of HSN. It is pointed out that entry 84(29) of the Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds should be interpreted as having the meaning identical to the meaning attributed to the specific words). He would, therefore, contend that on the said score also, pickles would fall under entry 84(29). He would submit that as of now, pickles marketed by the appellant are not registered under the Trade Marks Act, 1999 and, therefore, at any rate, would fall under entry 49. He makes the submission based on entry 84(29) on the basis that if the pickles are registered under the Trade Marks Act, going by the impugned clarification, they would be taxable under entry 84(29) and not at 12.5 per cent. Learned Government Pleader would join issue with the appellant in regard to the manner of applying the Rules of interpretation. There are two aspects in this case. Firstly, there is a clarification issued under section 94 of the Act. The Commissioner has, acting on the request of another assessee, issued the clarification dated July 3, 2006. Therein, as far as vegetable pickles are concerned, he has stated that it will attract tax at the rate of four per cent. except those sold under the brand name registered under the Trade Marks Act, 1999. Reference is made to entry 49 of the Third ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... empt under the said item, when it is sold under the registered kudumbasree brand. Next, pickles are mentioned under entry 49 of the Third Schedule. Entry 49 of the Third Schedule, inter alia, reads as follows:- 49. Food products like pickles, com flakes, savouries, sweets made of groundnuts, gingelly, other than those sold under brand name registered under the Trade Marks Act, 1999 (1) Pickles Goods coming under the Third Schedule is liable to be taxed at four per cent. Section 6 is the charging section. Section 6, inter alia, provides that the liability to pay tax shall be on the taxable turnover, in the case of goods coming under the Second and Third Schedules at the rates specified therein and all points of sale of such goods within the State. The Explanation provides that the Rules of Interpretation of the Schedules appended to the Schedules to the Act will apply to the interpretation of HSN Codes mentioned in the clause. Section 6A(c) provides that in the case of transfer of right to use any goods for any purpose or not for a specified period, tax is attracted at four per cent. and at point of such transfer. Section 6D provides that in the case of goods whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ointed out that Chapter 20 of the Harmonized Commodity Description and Coding System deals with preparation of vegetables, fruits, nuts or other parts of plants. Under the heading 2001, it is stated as follows:- 2001- Vegetables, fruit, nuts and other edible parts of plants, prepared or preserved by vinegar or acetic acid. 2001.10- Cucumbers and gherkins 2001.20- Onions 2001.90- Other This heading covers vegetables (see Note 3 to this Chapter), fruits, nuts and other edible parts of plants prepared or preserved by means of vinegar or acetic acid, whether or not containing salt, spices, mustard, sugar or other sweetening matter. These products may also contain oil or other additives. They may be in bulk (in casks, drums, etc.), or in jars, bottles, tins or airtight containers ready for retail sale. The heading includes certain preparations known as pickles, mustard pickle, etc. The goods covered by this heading differ from sauces of heading 21.03 in that the latter are generally liquids, emulsions or suspensions containing practically no pieces of fruit, vegetables or other edible parts of pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de 2001, is exactly the same as given in entry 84(29). In this case, we have already noted the ingredients of the pickles produced and marketed by the appellant. Furthermore, we notice that the State Legislature has specifically provided for pickles and sought to tax it at four per cent. unless it is sold under brand name which is registered under the Trade Marks Act, 1999. In fact, there can be no quarrel that pickles which are not sold under a brand name registered under the Trade Marks Act will not fall in entry 84(29). No HSN Code is indicated as against the word pickles . Thus, the Legislature has, even assuming for argument sake pickles could be brought otherwise within entry 84(29), in the well established powers of classification for the purpose of taxation, classified pickles as falling under entry 49. The only area of dispute is that once it is found that pickles are being sold under brand name which has been registered under the Trade Marks Act 1999, can the appellant be permitted to seek shelter under the HSN Code 2001 in respect of vegetable pickles ? In answering this question, we must consider as to what is the principle or principles of interpretation applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other hand, it only gives a harmonious construction to the provision which subserves the object and purpose for which the provision is intended to serve. We also notice that in a recent decision of the apex court in Catholic Syrian Bank Ltd. v. Commissioner of Income-tax [2012] 343 ITR 270 (SC), the court, inter alia, held as follows (pages 285 and 286 in 343 ITR):- Clear legislative intent of the relevant provisions and unambiguous language of the circulars with reference to the amendments to section 36 of the Act demonstrate that the deduction on account of provision for bad and doubtful debts under section 36(1)(viia) is distinct and independent of the provisions of section 36(1)(vii) relating to allowance of the bad debts. The legislative intent was to encourage rural advances and the making of provisions for bad debts in relation to such rural branches. Another material aspect of the functioning of such banks is that their rural branches were practically treated as a distinct business, though ultimately these advances would form part of the books of account of the principal or head office branch. Thus, this court would be more inclined to give an interpretatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , may possibly come under entry 84(29). But, in the case at hand, we are dealing with a product sold as vegetable pickles and we have already adverted to the ingredients. We are of the clear view that even on the basis of our understanding, of the HSN code and on the basis that pickles could be embraced within the scope otherwise, having regard to the connotation of the word pickles as it is understood in our country, it would not come under entry 84(29). As already noted by us, any other view would frustrate the object and be against the scheme of taxation in regard to pickles which we find to be clear otherwise. The Rules of Interpretation, no doubt, provides that while interpreting a commodity, if any inconsistency is observed between the meaning of the commodity without HSN number and meaning of the commodity with HSN number, the commodity should be interpreted by including it in that entry which is having HSN number. It is true that as against the word pickle in entry 49 of the Third Schedule, there is no HSN number, while there is a HSN number as against entry 84(29), namely 2001. It is also true that on going by the Rules of Interpretation, commodities which are given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation:- (1) If any dispute arises, otherwise than in a proceedings before any appellate or revisional authority or in any court or Tribunal, as to whether, for the purpose of this Act,:- (a) any person is a dealer ; or (b) any transaction is a sale ; or (c) any particular dealer is required to be registered ; or (d) any tax is payable in respect of any sale or purchase, or if tax is payable, the point and the rate thereof; or (e) any activity carried out in any goods amounts to or results in the manufacture of goods ; such dispute shall be decided by an authority consisting of three officers in the rank of Joint Commissioner or Deputy Commissioner nominated by the Commissioner on application by a dealer or any other person. (1A) If the dispute relates to the tax rate of a commodity, the details of the first seller, or the manufacturer of such goods in the State, as the case may be, shall be furnished by the applicant and they shall be made necessary parties to such application. (2) The authority shall decide the question after giving the parties to the dispute a reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (7) If the order passed by the authority mentioned in sub-section (1) is found to be prejudicial to the revenue ; the Commissioner may exercise his powers of suo motu revision, and may cancel, amend or vary such order:- Provided that no order shall be passed under this sub-section, until the party is given an opportunity of being heard. (8) Where the authority/Commissioner finds on a representation made to it by any officer or otherwise, that an order passed by it was obtained by the applicant by fraud or mis-representation of facts, it may, by order, declare such order to be void ab initio and thereupon all the provisions of this Act shall apply to the applicant as if such order had never been made.:- (a) Power of Commissioner to revise a clarification: The clarification once made does not bar the statutory authority from making another clarification on the same entry, if the first once was found patently wrong. (b) No retrospective effect: The later clarification issued by the Commissioner overriding the earlier clarification cannot have retrospective effect as the assessee's right under the Act to collect tax is de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remit the matter, in view of the plain scheme which we have already adverted to. Now let us examine the case of the appellant that the assessing officer has acted illegally in holding that the general registration of the brand name of the appellant is sufficient to get registration on all goods. It is true that the appellant is selling pickles under the brand name Happy . The appellant in its objections, however, took the contention that they have registered only the following goods under the Trade Marks Act:- 1. Item No. 29 of the Trade Mark Registry. Appl. No. 1307149 Appl Date 06-09-2004 Journal No. 1329(S-1) Certificate No. 550596 29. Meat, fish, preserved, dried and cooked fruits, vegetables, jellies, jams, milk and other dairy products. 30. Coffee, tea, cocoa, sugar, flour and preparations made from cereals, breads, biscuits, cakes, pastry and confectioneries, vinegar, spices. 31. Agricultural grains not included in other fresh fruits, vegetables, food stuffs included in class 31. It was contended, inter alia, that pickle is neith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... August, 2006 for multi-class application. Section 2(1)(w) of the Trade Marks Act, 1999 defines a registered trade mark as meaning a trade mark which was actually on the register and remain in force. The officer states that Happy label is remaining in force during the period of assessment. Application forms for various goods, like jam, ketchup/sauce, soft drinks, syrups and fruit jams filed by the appellant were cross-checked with the registry which revealed that they are in form TM1, for the States of Tamil Nadu (jam group) and West Bengal (jam group) (soft drinks, etc.). Thereafter it is stated that, therefore, the item pickle was rightly sold by the dealer under the trade mark registered under multi-class application obtained from the registry concerned. The contention that pickle cannot find a place under class 30 of the registration was rejected as without merit as it has obtained registration under either classes also. Reference is made to rule 22(2) of the Trade Marks Rules, 2002 to uphold that the Fourth Schedule only provides a means by which the general content of numbered international classes can be quickly identified, which indicates that broad line classification onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistry dated March 19, 2012 is extracted hereunder:- With reference to the above, I am enclosing herewith a copy of application on form TM- 51/form TM-1 for registration of the trade mark 'Happy' label per se bearing No. 1307149, 465494, 465496 and 465497 and also a copy of the application details in respect of the above numbers, which show that the said trade mark is not applied for registration in respect of the goods 'pickles'. I am to inform that specific registration of each and every item is essential under the Trade Marks Act, 1999 to get the status of registered trade mark for those items. According to the appellant, the office letter is dated March 19, 2012 and the reply which we have referred to from the Trade Mark Registry is dated March 23, 2012. But, the assessing officer has not cared to refer to the question or the answer in fact in the order. We are of the view that the assessee must be a person who has obtained registration of its brand in respect of pickles to suffer tax at 12.5 per cent. It is not sufficient that there is general registration obtained. Going by the reply given by the trade mark registry which we cannot hold to be i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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