STATE OF TAMIL NADU Vs. WANDER LIMITED

JUDGEMENT

(1.) ALL the cases relate to the interpretation of entry 24 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 (hereinafter called as "the Act"), as it stood before Tamil Nadu Act 39 of 1983, entry 103 as amended by Tamil Nadu Act 39 of 1983 and the Notification G.O.P. No. 253 dated 17th March, 1986, issued under section 17 of the Act.

(2.) THE Tax Case No. 1145 of 1987 has been filed by the Revenue against the order of the Sales Tax Appellate Tribunal dated 21st July, 1986, made in T.A. No. 74 of 1985. THE respondent/assessee are manufacturers and dealers in the product known as "Spert". For the year 1982-83, the assessing officer treated the turnover of sales of "Spert" as food made of milk, cereals flour and starch coming within the entry 103 of the First Schedule to the Act attracting 10 per cent sales tax. During the year 1982-83, the relevant entries were as follows :

(3.) WRIT Petitions Nos. 9079, 11204 and 13828 of 1990 have been filed by M/s. F.D.C. Limited, who claimed to be manufacturers of pharmaceuticals and food products. In particular, they manufacture two products called, "Soyal" and "Prosoyal spray dried powder". They are special baby infant foods and registered under the Trade and Merchandise Marks Act, 1958. The basic ingredients of these products are soya bean powder. The product is said to be highly nutritious and replace milk in all respects. These two products are advised by doctors in respect of babies with lactose intolerance. The petitioners claimed the product as baby milk food product or as life-saving drugs and medicines. They were writing letters to the second respondent seeking clarification on the rate of sales tax. They also claimed the reduced rate of tax under G.O.P. No. 253 dated 17th March, 1986. The third respondent had originally accepted the claim of the petitioners and passed an order on 9th September, 1988 in TNGST No. 006433/87-88 under section 12 of the Act. Subsequently, notices were issued on 27th January, 1990, 26th March, 1990 and 14th June, 1990, proposing to disallow the lower rate of tax at 4 per cent and holding that the two products do not find place in the list of life-saving drugs and can be taxed only under entry 103 taxable at 10 per cent. The petitioners again filed objections. WRIT Petition No. 9079 of 1990 was filed for a writ of declaration to declare that the benefit of exemption and lower rate of tax at 4 per cent under the relevant Government orders are applicable to the two products "Soyal" and "Prosoyal spray dried powder". WRIT Petition No. 11204 of 1990, was filed for the writ of certiorarified mandamus to quash the notices dated 27th January, 1990, 26th March, 1990 and 14th June, 1990 and to direct the respondents to grant exemption and levy the lower rate of 4 per cent. WRIT Petition No. 13828 of 1990 is for the writ of certiorarified mandamus to quash the assessment order dated 5th July, 1990 for the year 1987-88 and to direct the third respondent to grant exemption or for the levy of the reduced rate of 4 per cent as per the relevant Government orders. Counter-affidavits have been filed in all the writ petitions stating that there is absolutely no milk ingredient in the two products manufactured by the petitioners. Therefore, by no stretch of imagination, the products can be called as milk food. The products being manufactured from extracts of cereal or vegetables or starch or flour, the same can be classified only under sub-entry (x) of entry 103 of the First Schedule to the Tamil Nadu General Sales Tax Act. For the same reason, G.O.P. No. 253 dated 17th March, 1986, reducing the rate of tax from 10 per cent to 4 per cent will not apply to the products manufactured by the petitioners. It is also stated that the contention that the products are baby milk food or they are life-saving drugs is mutually contradictory and cannot be accepted. It is also contended that inasmuch as final assessment orders were passed on 5th July, 1990, WRIT Petitions Nos. 9079 and 11204 of 1990 have become infructuous. Against the final order of the assessment dated 5th July, 1990, the petitioners have right of a regular appeal.