Summary
On the technical and regulatory evidence, Appy Fizz was a fruit-juice-based drink under Item 5 of Entry 71, rather than an aerated branded soft drink attracting the higher Kerala VAT rate. Common parlance was not the exclusive test for the technical entry. The clarification authority had to consider the manufacturer’s evidence despite an earlier distributor assessment.
Issues
- How Appy Fizz was classified under the relevant Kerala VAT provisions.
- Whether technical evidence and a manufacturer’s clarification application were displaced by the earlier distributor case.
Provisions considered
- Sections 6(1)(a), 6(1)(d) and Entry 71(5) of SRO 119/2008, Kerala Value Added Tax Act, 2003The amended residual entry retained fruit-juice-based drinks and covered this product on the proved evidence. (¶¶ 19–31, 63)
- Section 94, Kerala Value Added Tax Act, 2003The manufacturer’s separate clarification proceeding required consideration of its evidence; the earlier other-assessee assessment did not foreclose it here. (¶¶ 43–44, 64–65)
Held
- Scientific manufacturing evidence, food-authority materials and the limited preservative role of carbon dioxide were relevant. Common/commercial parlance alone could not resolve the technical classification, and the Revenue supplied no contrary material sufficient for its asserted entry. (¶¶ 32–39, 49–62)
- Read with the neighbouring fruit and health-drink entries, Item 5 encompassed fruit-juice-based drinks. The amended notification did not transfer them into the unchanged higher-rate entry. (¶¶ 40–42, 63)
- The applicable judgment classified Appy Fizz at 12.5% under the amended entry, noting 14.5% at the time of judgment; these were the historical VAT rates adjudicated, not a determination of later tax regimes. (¶ 63)
Result
Manufacturer’s classification appeals allowed and adverse orders set aside; Revenue’s challenge to clarification proceedings dismissed. Connected dealer proceedings to follow this classification with consequential adjustment of deposits as necessary.