STATE OF KERALA Vs. HINDUSTAN LEVER LTD.

JUDGEMENT

(1.) The Revenue is in revision challenging the findings of the Kerala Sales Tax Appellate Tribunal, Ernakulam finding that 'premix coffee' is to be treated as 'coffee' coming under Entry 42 of the First Schedule to the Kerala General Sales Tax Act, 1963 ('The Act' for short) exigible to 8% tax and the product 'frozen dessert' is to be classified under the residuary entry. The questions of law framed in this revision are as follows:

(2.) Assessment for the year 1999-2000 was completed on best judgment basis. The Assessing Officer had assessed the turnover of 'premix coffee' at 20% classifying the same under Entry 141 of the First Schedule to the Act and with respect to the product 'frozen dessert', it was assessed at 12% coming under Entry 45 of the First Schedule to the Act. It was challenged in appeal by the assessee and the first appellate authority partially allowed the appeal modifying the assessment order vide Annexure-B. In further appeal before the Tribunal, it was found that the product 'premix coffee' would fall under Entry 42 of the First Schedule to the Act exigible to tax @ 8% following an earlier decision of the Tribunal in TA No.555/2004, whereas, 'frozen dessert' is to be classified under the residuary entry as there is no direct and specific entry available under the First Schedule. The order of the Tribunal at Annexure-D stands challenged by the Revenue. It is stated that the Tribunal had mistakenly relied on the earlier decision in TA NO.555/2004 produced at Annexure-C, which was with respect to 'french coffee', and did deal with 'coffee premix'. It is submitted that the product is in the form of powder to be used for preparation of beverage, which comes squarely under Entry 141 of the First Schedule to the Act, while Entry 42 refers only to coffee and includes coffee beans, coffee seeds (raw or roasted) and coffee powder, except coffee power sold under a brand name. The Tribunal went wrong in finding that 'coffee premix' would come under the said classification. With respect to 'frozen dessert', the Tribunal observed that it would come under the residuary entry. The product itself is described as "Kwality Walls Feast Chocolate" which would bring it squarely under Entry 45 and under the residuary entry.

(3.) The learned counsel for the respondent-assessee would contend that 'premix coffee' pertains to a mix of coffee powder, milk powder and sugar to be used in a vending machine and cannot therefore come under Entry 141 which is for beverages and would squarely come under Entry 42. Entry 42 and the Explanation thereunder reads as thus:- <FRM>JUDGEMENT_784_LAWS(KER)7_2018_1.html</FRM>