IMPORTANT POINT
It is settled law that when one particular item is covered by one specified entry, then the Revenue is not permitted to travel to the residuary entry.

Headnote:Central Sales Tax Act - Entry 184. -Rajasthan Sales Tax Act -Issue in consideration whether Jaljira and similar other products are not Masala and therefore they are liable to be assessed to sales tax at the rate of 10% and not 16%. -. Most of the items used in the manufacture of Jaljira are nothing else but spices- They are grinded and mixed- When spices are grinded and mixed, it gives rise to a new product, which is a mixed masala- Different ingredients are used in preparation of Masala after grinding and mixing several ingredients and when they are so grinded they lose their own identity and character and a new product separately known to the commercial world comes into existence- Sales tax is levied on sale of commercial commodities, therefore, individual spices could be termed as different commercial commodities- When they are grinded and mixed they give rise to a separate commercial commodity altogether which could be taxed separately- It is settled law that when one particular item is covered by one specified entry, then the Revenue is not permitted to travel to the residuary entry-If from the records it is established that product in question could be brought under a specific entry then there is no reason to take resort to the residuary entry- There is no doubt that Jaljira is a drink- The contents of Jaljira is put into water and taken as digestive drink but when looked into the manner and method of preparation of the product Jaljira, it is a mixture of different spices after grinding and mixing- Hence, it is nothing but a Masala packed into packets of different nature/quantity and sold to the consumers- It would, therefore, for all practical purposes would come within the Entry No. 184 and it could not be said that it would come under residuary entry as held by High Court-Impugned order of High Court set aside-Appeals allowed. (Paras 17 to 24)
       Facts of the Case :
        Issue in consideration in present appeals was whether Jaljira and similar other products are not Masala and therefore they are liable to be assessed to sales tax at the rate of 10% and not 16%.
       Findings of the Court :
        The Court held that Most of the items used in the manufacture of Jaljira are nothing else but spices. They are grinded and mixed. When spices are grinded and mixed, it gives rise to a new product, which is a mixed masala. Different ingredients are used in preparation of Masala after grinding and mixing several ingredients and when they are so grinded they lose their own identity and character and a new product separately known to the commercial world comes into existence. Sales tax is levied on sale of commercial commodities, therefore, individual spices could be termed as different commercial commodities. When they are grinded and mixed they give rise to a separate commercial commodity altogether which could be taxed separately. It is settled law that when one particular item is covered by one specified entry, then the Revenue is not permitted to travel to the residuary entry. If from the records it is established that product in question could be brought under a specific entry then there is no reason to take resort to the residuary entry. There is no doubt that Jaljira is a drink. The contents of Jaljira is put into water and taken as digestive drink but when looked into the manner and method of preparation of the product Jaljira, it is a mixture of different spices after grinding and mixing. Hence, it is nothing but a Masala packed into packets of different nature/quantity and sold to the consumers. It would, therefore, for all practical purposes would come within the Entry No. 184 and it could not be said that it would come under residuary entry as held by High Court. Impugned order of High Court was set aside-Appeals were allowed

JUDGMENT

Dr. Mukundakam Sharma, J. —

1. Leave granted.

2. Since the issues involved in these appeals are identical, we propose to dispose of all these appeals by this common Judgment and Order.

3. In appeals arising out of SLP (C) Nos. 11358 of 2008 and 15883 of 2008 the issue which falls for our consideration is as to whether Jaljira which is a product manufactured by the respondent herein is only an appetizer and is not a masala and therefore liable to sales tax at the rate of 10% and not 16%. In appeals arising out of SLP (C) Nos. 27432 of 2008 and 27433 of 2008 a similar question arises for consideration that as to whether Jaljira and similar other products are not Masala and therefore they are liable to be assessed to sales tax at the rate of 10% and not 16%.

4. In order to decide the aforesaid issues some factual aspects are required to be mentioned. The respondent firm is a manufacturer and seller of Jaljira and some other products but in the present appeals we are concerned only with the product called Jaljira. The respondent deposited sales tax at the rate of 10% assuming that Jaljira is not a Masala and hence taxable at the general rate of 10% as residuary entry 199, which reads as under:

“199. General rate, that is all goods that are not covered by S. No. 1 - 198. 10%”

5. The counsel appearing for the appellant submitted that the respondent is liable to pay sales tax at the rate of 16% on the product manufactured by it and the assessing officer was justified in treating the respondent liable to pay sales tax at the rate of 16%.

6. On examining the entire matter it appears that a Notification being notification dated 26.03.1999 was issued by the State Government, which was to the following effect:

Sr. No. Detail of Goods Tax Rate

xxxxxx xxxxxx Xxxxxx

119 All kinds of eatables & non alcoholic potable 12% liquids such as fruit syrups, distilled juices, jams [chatni, murabbas], fruit juice, dry milk power, drink concentrates of all types and forms, essence, concentrates, corn flaks and wheat flakes, custard powder, baking powder, ice-cream powder and packed masala. Subsequently another notification being notification dated 29.03.2001 was issued by the State Government to the following effect:

Sr. No. Detail of Goods Tax Rate

xxxxxx xxxxxx Xxxxxx

82 Dry Fruits, Supari, Kirana items, Masala 4% (different from packed masala) such as Mirch, Dhanai, Saunf, Methi, Ajwain, Sua, Halsdi, Kathodi, Amchur, Elaichi, Jeera (cumin seed) 184 All kinds of eatables & non alcoholic potable 16% liquids such as fruit syrups, distilled juices, jams [chatni, murabbas], fruit juice, dry milk power, drink concentrate of all types and forms, essence, concentrates, corn flaks and wheat flakes, custard powder, baking powder, ice-cream powder and packed masala.Subsequent thereto also a notification was issued by the appellant herein on 22.03.2002 making the same effective from the date of its issuance, wherein Entry 80 includes the following:

Sr. No. Detail of Goods Tax Rate

80 Dry Fruits, Supari, Kirana items, Masala 4% ([when sold in unmixed form, whether lose or in polyethylene packs]) like Mirchi, Dhaniya, sonf, methi, ajwain, suwa, haldi, kathodi, amchoor and asalia, jeera (cumin seed) Whereas Entry 186 includes the following:

Sr. No. Detail of Goods Tax Rate

186 All kinds of eatables & non-alcoholic potable 16% liquids such as fruit syrups, distilled juices, jams [chatni, murabbas], fruit juices, drink concentrates of all types and forms, essences, concentrates, corn flaks and wheat flakes, custard powder, baking powder, ice-cream powder and [multi-ingredient packed masala].

A letter dated 12.11.2001 was issued by the Deputy Secretary, Finance Department, Tax Division, Government of Rajasthan to the Commissioner, Commercial Taxes Deptt, Rajasthan, Jaipur, which reads as follows:

“........I am to state that “Packed Masala” used in entry number 184 means, a Masala where two or more ingredients are mixed and sold in packed conditions. Spices

Click Here to Read the rest of this document

2011 Supreme(SC) 310

IMPORTANT POINT It is settled law that when one particular item is covered by one specified entry, then the Revenue is not permitted to travel to the residuary entry.

IMPORTANT POINT
It is settled law that when one particular item is covered by one specified entry, then the Revenue is not permitted to travel to the residuary entry.