In a significant ruling, the High court of Punjab and Haryana held that “Slice” falls under Entry 100D of Schedule-C of the Haryana Value Added Tax (HVAT) Act, 2003 and 5% tax is applicable on the slice.
The High court of Punjab and Haryana allowed the appeal filed by the M/s Saluja and Company, engaged in the business of trading of mineral water, aerated drinks and a mango based fruit drink ‘Slice’. The Appellant is registered with the Assessing Authority, Rohtak (AA).
The DETC-cum-Revisional Authority, Rohtak issued a notice to the Appellant under Section 34 of the Haryana Value Added Tax (HVAT) Act, 2003 on the basis that the Assessing Authority has assessed the tax on slice/Maaza @ 5.25% instead of @ 13.125% as the goods are unclassified under the Haryana Value Added Tax (HVAT) Act, 2003.
The assessee contended that Slice is a fruit drink the main ingredients of which are mango, water and sugar. According to the Appellant, the mango used in its pulp form gives the drink its flavor and main essence. Accordingly, the product is covered under the Entry 100D of Schedule C of the Haryana Value Added Tax (HVAT) Act, 2003.
Relying on relevant judicial decisions, the High Court accepted the contentions of the appellant that the Entry 100-D of Schedule C to the HVAT Act does not admit of a narrow interpretation particularly when it uses the words ‘fruit drinks made of’ the fruit in question.
“Even if one applied the common parlance test, the Appellant is right in contending that Slice does not cease to be a drink made of fruit only because the actual fruit content is 16%,” the bench said.
Based on the above findings, the division bench consisting of Justice S. Muralidhar and Justice Avneesh Jhingan allowed the appeal and held that “Slice” falls under Entry 100D of Schedule-C of the Haryana Value Added Tax (HVAT) Act, 2003 and 5% tax is applicable on the slice.
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