1. The appellant-assessee has preferred the present appeal by raising three questions of law, but, in our view the question really arises for consideration can be formulated as under:

“Whether the product of the petitioner as vegetable fat spread can be said as included in Entry No.32 of the III Schedule or not?”

If the answer is negative it will necessarily fall in the residuary category. If the answer is in the affirmative it would fall under Entry 31 for chargeability of tax.

2. The present appeal is directed against the decision of the Advance Ruling Authority whereby the Advance Ruling Authority has found that the product of the petitioner, ‘vegetable fat spread’ (hereinafter referred to as the “product in question”) would not fall in Entry No.31 but it is a different product and hence, would fall in the residuary category.

3. The relevant facts are that the appellant is manufacturing the product in question and is marketing the said product accordingly. The Circular was issued by the Commissioner of Commercial Taxes vide Order dated 31.1.2015 for the product of nutralite clarifying that the said product is different than edible oil. The applicant made an application to the Advance Ruling Authority under the Karnataka Value Added Tax(hereinafter referred to as “the Act”) for clarification.

The Advance Ruling Authority ultimately interalia observed at Paragraph5 which reads as follows:

“In the instant case, as admitted by the applicant and as could be seen from the ingredient contents of the said commodity, ‘vegetable fat spread’ is a type of fat spread and is manufactured using several ingredients including edible oil and vegetable fat content. Here, edible oil is one of the ingredients, etc. In case of milk fat spread, milk is one of the major ingredient, but the commodity cannot be treated on par with milk which is exempt from tax. Similarly, vegetable fat spreads cannot be considered as edible oils, just because of the fact that the edible oil is one of the ingredients of vegetable fat spreads.

Entry 31 of the Third Schedule to the KVAT Act, 2003 reads as under:

“Edible oils (No refined and refined), but excluding coconut oil sold in sachets, bottles or tins of 200 grams or 200 mili litre each or less, including when such consumer containers are sold in bulk in a common container, oil cake” On plain reading of the above entry, it can be seen that vegetable fat spreads are not falling under any of edible oils. Fat spread is a different commodity prepared through a process with the help of different ingredients with edible oil as one of such ingredients. Generally, edible oils are either in liquid form or saturated form which can be converted into liquid form for consumption. Whereas the fat spreads are consumed in a form like butter only. Further, edible oils are commonly used for cooking and not consumed directly, whereas the fact spreads are consumed directly. Hence, on the usage theory also, vegetable fat spreads cannot be categorized as the commodities on par with edible oils.”

Thereafter, the Advance Ruling Authority clarified that the product is an unscheduled commodity and therefore, tax at the rate of 14.5% would be chargeable. Under the circumstances, the present appeal before this Court.

4. We have heard Mr. G. Rabinathan, learned counsel for the appellant and Mr.T.K.Vedamurthy, learned Addl. Government Advocate appearing for the respondents.

5. The contention raised on behalf of the appellant was that for the identical product, being marketed as margarine, the Apex Court found that it is made of edible oil and therefore, it should be treated as edible oil. He submitted that for edible oil Entry No.31 is already provided. Once the product of the appellant falls under Entry No.31, it cannot be termed as unscheduled commodity and therefore, the decision of the Advance Ruling Authority is erroneous and calls for interference.

6. Whereas Mr.T.K.Vedamurthy, learned Addl. Government Advocate contended that the decisio