M/S. PARLE AGRO (P) LTD. versus COMMISSIONER OF COMMERCIAL TAXES, TRIVANDRUM
[2017] 5 S.C.R. 30, Supreme Court of India, 2017
Outcome: Disposed off
Segment: Ratio
A 
B 
. 
[2017] 5 S.C.R. 30 
MIS. PARLE A6RO (P) LTD. 
v. 
COMMISSIONER OF COMMERCIAL TAXES, TR:IVANDRUM 
(Civil Appeal Nos. 6468-69 of 2017) 
MAY09,2017 
(A. K. SIKRI AND ASHOK BHUSHAN, JJ.) 
Kera/a Value Added Tax Act, ¥003: 
! 
ss.6(l)(a) and 6(l)(d) - Classification of the procJuct 'Appy 
C 
Fizz'~. Whether u/s.6(1)(a)fas aerated branded soft drink' invoking 
tax liability @ 20%) or under Entry 71 Item 5 of Notificption issued 
uls.6(l)(d) (as 'fruit juice based drink' invoking tax liability @ 
12.5% - Held: Assessee has succesSJully proved by relevant 
scientific and technical materials that th(! product 'Appy fizz' is a 
commodity which is fully covered by Item 5 of Entry 71 as amended 
D 
by S.R.O. No.119 o/2002 with tax liability@ 12.5% (now@ 14.5%). 
Interpretation a/Statutes: 
-, 'Rules of interpretation - Common parlance test or commercial 
t~st -Applicability of - To interpret scientific and.,teclmica/ words -
E Held: While interpreting scientific and technica/'words, cornmo_n 
parlance test/Commercial test is not the only test and technical 
evidence needs to be looked into. 
· 
. 
Evidence: 
Onus to prove that particular goods fall in particular tariff 
F 
item is on the Revenue - Tax/Taxation. 
Principle: 
Principle of 'Noscitur a Sociis' - Applicability of 
" 
Allowing appeal Nos. 6468-69 of 2017, dismissing appeal 
G · No. 6470 of .2017 and disposing of appeal N()s. 6471-72 of 2017, 
the Court 
· 
· 
"€ivil Appeal Nos. 6468-69 of 2017: 
HELD:l.1 All goods
enumerated in Section 6(l)(a) ofKerala · 
· Value Added Tax Act, 2003, by the Legislature itself indicates 
H 
that higher rate of tax has been fixed for those goods which are 
30
M/S. ~ARLE AGRO (P) LTD. v. COMMISSIONER OF 
31 
COMMERCI'AL TAXES 
-
-
harmful for environment and health. Aerated branded soft drinks, A 
excluding soda is alSo in the company of the above goods -
described in Section 6(1)(a). Section 6(1)(a) also r:.ef~rs to 
Schedule I, Schedule II and Schedule III. ~ax in -S~hedule I is -
exempted and rate in Schedule II is 1 % whereas rate of tax in 
Schedule III is 5% in contrast to legislative policy in fastening B 
tax liability at very high level on goods under Section 6(l)(a) is 
thus clear and categorical. Those goods which are not congenial _ 
to health and environment are charged with higher tax level, which 
is the purpose and object clear from the legislative s'cheme. 
[Para 26] [50-))-F.] 
-
-
1.2 Section 6(l(d) empowers the ·state to notify a list of 
goods which are taxable at the rate of 12.5% (at present at 14.5%) 
which does not fall under cfau-se (a) and.(c). The delegated: 
legislative power of issuing 'notification to the St~te Government 
is thus restricted and can be exercised only when goods do not 
c 
fall under Section 6(1)(a) or Section 6(l)(c). The State of Kerala - D 
exercising its delegated legislative power has issued notification 
under Section 6(1)(d). [Para 27] [50-G-~] 
' 
. 
-
1.3 The aerated branded soft drinks, excluding soda were 
aiways covered under Sectio-n 6(l)(a) and.prfor to 1" April,.2007 
it bears HSN Code 2201.10.10. Entry 11 Item 4 of the Notification 
E 
also reads as "fruit pulp or
fruit juice based drinks with_ HSN 
Code 2202.90.20". When fruit juice based drinks were·covered 
\under Entry 71, the State Government knew that fruit juice based 
drinks were not covered by Section 6(l)(a) .. Applicability of t~e 
. power of State to issue notification under Section 6(1)(d) arises. 
only when goods were not covered by Section 6(1)(a). Fruit juice 
F 
based drinks, thus, were never treated as -'aerated branded soft 
' 
drinks' which wa.s the understanding of State of Kerala while 
issuing notification under Section-6(l(d). Had fruit juice based 
drinks we,re also to be covered by aerated branded soft drinks, 
there was no occasion for subo,rdinate legislative authority, i;e., 
G 
the State Government, to ineiude sucll products in notification 
. under Section 6(1)(d). [Para 29) _[Sl-F-H, 52-A) 
. 
-
1.4 A bare perusal of Entry 71 as substitutecl by 
S.R.O.No.119 of 2oos; indicates that the Entry covers non-
. alcoholic' bever!lges and their powders, concentrates and tablets H -
\
32 
SUPREME COURT REPORTS 
[2017] 5 S.C.R. 
A in any form including - Item No.2 contains fruit juice, fruit 
concentrates, fruit squash, fruit syrup and pulp and fruit cordial. 
Soft drinks other than aerated branded soft drinks are included 
in Item No.3. He.alth drinks of all varieties are included in Item 
No.4 and similar other products not specifically mentioned under 
any other entry in this list or in any other Schedules wer:e included 
B in Item No.5. The .Entry of fruit juice based drinks got subsumed 
in the residuary entry and the amen.dment by S.R.O. No.119 of 
2008 did not change or affect the character and content of the 
products which were included in Entry 71.[Para. 31] [52-E-F] 
2.1 The High Court while interpreting the entries under 
C Section 6(l)(a) and Entry 71 of the notification S.R.O.No.119 of 
2008 had applied common parlance test. The High Court has 
also relied on Rules oflnterpretation as contained in the Appen~ix 
to Schedule to Act, 2003." Applying the common parlance test, 
the High Court has concluded tha~ product in question is covered 
D by 'aerated branded soft drink'. Strictly speaking the Ru.le of 
Interpretation which is .given in the Appendix to Act, 2003, are 
the Rules .of htterpretation of. Schedules that is Schedule Nos.11 
II and III. Thus, for interpretation of any item in the Scheduie, 
Rules of Interpretation as gi.ven 1in, the Appendix are applicable. 
E 
[Paras 32, 33] [52-G; 53-D] 
2.2 In the present c11se Item No.6(1)(a) as
well as Entry 71 
of S.R.O. No.119 of 2008 issued in exercise of power under 
Section 6(l)(d), are the entries which are not men*iOJled in the 
Schedule. The explanation .to Section 6(l)(a) appfles the Rules 
of Interpretation of the Schedules· to the interpretation of the 
F 
HSN codes mentioned in Section 6(l)(a) but Expfo11ation does 
not say anything about the· items where HSN code (s not there. 
The Rules of Interpretation of the Schedul~s, thq~, directly are 
not attracted with regard to the 'interpretatioii of the entry which 
does not mention .with HSN code in Section 6(1)(a) 11Ithough 
G principle contained in such Rules. of Interpretation may apply. • 
[Paras 33, 34] (53-E~l\] 
· 
· · 
" 
2.3 Thus,, commoQ· partance test or commercial test which 
are to be applied on the commodities in the Schedules which 1Jre 
not given with HSN code i~ directly not applicable ilnder Item 
H 6(1)(a), hence, applicability of other Rules of Interpretation which 
•
MJS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
33 
. 
COMMERCIA~ TAXES 
were required to be 11pplied ls not ruled out. Hence, in the· A 
11ppropriate case apart from conimon parlance test or commercial 
·test any other test ~an be applied for interpretation of the 
commodities included ~n Section 6(1)(a) apart from those which 
are given .HSN code. [Para 34) [54-A-C) 
Porritts & Spencer (Asia) Ltd. v. State of Haryana 
B 
1979(1) SCC 82 : [1979) 1 SCR 545; Collector of 
Akbar Badruddin Jiwani vs. Collector of Customs 1990 
(47) ELT 161 - relied on. 
2.4 In the present case, the Entry 2 under Section 6(1)(a) 
uses the word 'aerated'. This is scientific term and; has been C 
repeatedly used in different statutes including the C_entral Excise 
Tariff and different HSN. codes also uses the term 'aerated'. The 
word 'aerated' is scientific and technical w.ord used under different 
statutes and the scientific and technical ~eaning of the word 
'a.erated' can be. looked into ror· finding out the real import of the 
. Entry. [Pua 38) [58-B] 
. 
J 
. 
D 
2.5 Therefore, common parlance and commercial parlance 
test was not the only test which could have been applied for 
interpreting the entries in items mentioned in Section 6(l)(a) 
and the entries which contain scientific and technical word were 
also to be looked into in technical and scientific meaning. Both E 
the High Court and the Committee of Joint Commissioners 
I discarded the evidence of technical and scientific mea'ning of
word. 
The appeilant has rightly relied on the technical evidence brought 
on the reco.rd which indicate that use of carbon dioxide to· the 
~xtent of o.6 per cent was only for the purpose of preservative in 
F 
. packaging the commodities and the product was thermally 
processl)d and carbon dioxide was added·to as the preservative. 
[Para 39) [58-C-E) 
~· 
3. Applying the principle of construction of 'noscitur a sociis' 
on Entry 71, it is clear that clause 5 of Entry 71 has to take colour G 
and meaning from the other items included in Entry 71. Item 5 of 
Entry 71 uses the words "similar other products not specifically 
mentioned under any other entry in this list or any other 
schedule". Thus, the products Wbich .are to be covered under 
Item No. 5 are similar other products •. When Item· No.2 of the · 
H
34 
SUPREME COURT REPORTS 
(2017] 5 S.C.R. 
A Entry 71 that is fruit juice; fruit concentrates, fruit squash, fruit 
'syrup, and pulp, and fruit cordial and item No.4 that is health drinks 
of all v.arieties, are kept in mind the fruit juice based drink shall 
fall in Item No.5 .. Both High Court and Committee of 
Commissioners overlooked this principle while interpreting item 
B 
No.5 of Entry 71. [Para 42) [59-H; 60-A-B] 
Pardeep Aggarbatti v. State of Punjab 11997 (96) E.L. T. 
219 (S.C.) - relied on. 
· 
'Principles of Statutory Interpretation' 14'h Edition, by 
Justice GP. Singh - referred to. 
C 
4. Proceeding under Section 94 of Act, 2003 .i~ a sepan1te 
and specific proceeding. In the present case when the appellant 
has filed application under Section 94, the judgment of Division 
Bench in Mis. Trade Lines case was already rendered. The order 
· passed by the Division Bench in Mis. Trade Lines case was a case 
D of assessment of another assessee which decision was based on · 
the materials brought on the record by the said assessee and 
could not have precluded the appellant from filing the application 
under Section 94. Thus, the judgment of the Division Bench of 
Kerala High Court in. Mis .. Trade Lines case did not conclude the 
issue and the Committee of.'Commissioners was not absolved 
E 
from its duty of deciding the same .in accordance with the materials 
brought on the record by the appellant and although the 
Committee 11oticed all the pleadings and
contentions but mainly 
relying on the ruling of Mis. Trade Lines case disptissed the 
clarification application which cannot be sustained. [Paras 43, 44) 
F 
[60-E; 61-B~D] 
5. Appellant had relied on the order of CESTAT dated 
18.03.2008, which was dismissed by this Court on &'h July, 2009. 
The High Court without giving cogent reason has refused to rely 
on the said adjudication. Though the adjudication by the CESTAT 
G was with regard to the HSN Code which found place in Central 
H 
· Excise TariffAct. The competent entry under which CESTAT 
authorities were to adjudicate regarding the product has already 
been extracted "Fruit pulp or Fruit juice based drink" on whii;lt 
CES.TAT had ruled that product is not included in aerated water 
·and was included in entry ~s fruit juice based drink. The product
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
35 
COMMERCIAL TAXES 
was not held to be aerated water was a reJevant fact.to be. A 
considered even though in the entries under the Act, 2003, now 
there are no HSN Codes mentioned. Even though the order of 
CESTAT did not conclude the controversy. in favour of the 
appellant.but fact.that the CESTAT did not hold the producfto be 
under the "aerated water" was a.factor which necessitated a more 
deeper consideration by the High Court to find out as to whether· B 
· the product is 'aerated branded soft drink' or not. [Paras 45, 48 
and 49] [6~-E; 63-B-E] 
6.1 The appellant had been granted the licence to 
manufacture the product under Fruit 'Products Order 1?55.' The , 
appeliant .has been labelling the product as 'Fruit Drink' under C 
the Food Safety and Standards (Food Safety & Standards and Food 
Additives). Regulations, 2011. The statutory regulations require 
that beverages must contain minimum of 10% fruit juice to be· 
called a Fruit Drink. [Para 51) (63-G-H] 
·6.2.It is on the record· that .the contents of food product of D 
'Appy Fizz' are more than 10%. In Section 94 proceedings the 
appellant has filed letter of the Government of India dated 
28.03.2005 containing the "Subject : Opinion for the product as 
'Appy Fizz"'. According to the Government oflndia, Ministry of 
Food Processing Industries the product containing 10% of fruit 
E 
juice are commonly known as fruit drinks. The appellant has also 
filed the order of
19'h August, 2015 issued by the Food Safety· and 
Standards Authority oflndia, Ministry of'Health & Family Welfare 
where permission was granted to Manufacture,. Store and Sale 
the product 'Appy Fizz' in pet bottles under the category 2.3.10 
i.e. Thermally Processed Fruit Beverages/Fruit Drink/Ready to 
serve Fruit Beverages of Food Safety and Standards (Food 
Product Standards & Food Additives) Regulations, 201J with name 
of the food i~em as Fruit Pulp or Fruit Juice based Drinks for 
which you are already holding a license." [Paras 52, 53) [64-F; 
65-C-E] 
6.3 The Committee of the Joint Commissioners while 
deciding the application under Sect~on 94 has noted the aforesaid 
onJers pass_ed by .the Food Safety Authorities whic)J were relied 
by the appellant but it discai:ded the above said orders
1and opinhm . 
F 
G 
H
36 
SUPREME COURT REPORTS 
[2017] 5 S.C.R. 
A · relying on the order passed by the Kerala High Court in the case 
of Mfs·. Trade: Line.s decided on 17.11.2014. and held that the 
pr()duct.is taxable at the rate .()f 20% as· per SI. No. 2 of Section 
6(l)(a). [Para S4] [6S-F-GJ 
· · 
·. 
6.4 What'is the process for manufacture in accordance with 
B . · the Food Safety and Standards Act, 2011 and the Regulations 
framed therein and what is the nature and characteristic of the 
. product which has been licensed to be manufactured to the 
appellant cannot be said to be an irrelevant factor. while examining 
the nature and contents of the product. Whether the product is 
an aerated branded soft drink or can be covered by residuary of 
C clause (S) of Entry 71 is a question on which the m.anufacture 
Ucence, orders issued by Fooci Safety and .Standards Authority of 
India were relevant facts. [Para SS) [6S-G-H; 66-A-B] · · 
6.S The appellant has ·also, before the Committee of Joint 
Commissioners, produced the technical certificates. The 
' D appeilant has filed a certificate dated 11:06.201S from the Institute 
of Chemical Technology. The technical opinion clearly mentioned 
that carbon dioxide is used for pres~rvation purpose only. Before 
·the Committee of Commissioners the entire process of 
manufacture of the product was explained along with all relevant 
E orders and certificates of Food Safety Authorities. It was stated 
· that the Experts in their opinions and
certifications have mentioned 
that product is commercially and technically distinct from products 
whkh have classified as 'aerated branded soft drinks'. In the 
application which was filed for clarification, elaborate process of 
manufacture was meniioned. The materials which were filed by 
F 
the appellant before the Clarification Authority were relevant 
materials for understanding the manufacture process and the · 
nature and contents of ultimate product. The expett authority 
and its opinion which were relied by the appellant were required 
to be adverted to both by the Clarification Autjtority as well as by 
a the High Court and expert opinion and materials have been 
erroneously discarded. [Paras S6-60] [66-D-E; 68-G-H; 69-A-
C; 71-B-C] 
6.6 It is further relevant to note that Revenue has not filed 
any material on the record either before the Clarification Authority 
H or before the High Court in support of its view that product is
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
37 
COMMERCIAL TAXES 
.covered under Section 6(l)(a) that is 'aerated branded soft dri.nk'; A 
Onus to prove t\lat particular goods fall in particular tariff item is 
on the Revenue. (Para 61) [71-C-D]. 
· 
Hindustan Ferodo ltd. v. Colle~tor of Central Excise, · 
Bombay 1997(89) ELT 16 (SC) -
r~lied on. 
7. The appellant has successfully. proved by relevant B 
scientific and technical materials that the product in question that 
is 'Appy·Fizz' is a commodity which is fully covered by Item No.5 
of Entry 71 as amended by S.R.O. No.119 of 2008. The High 
Court discarded scientific and expert opinion with regard to 
manufacturing process and contents of the product. The orders c 
of Food Safety Authority were also discarded which were relevant 
for considering the nature and contents of product. The 
adjudication by CESTAT was relevant at least on the aspec~ .that 
the 'Appy Fizz.' is not aerated which was also discarded by the 
High Court as well .as by t.he Committee of the Commissioners .. 
Thus, the. appellant has successfully proved ~rom the materials D · 
brought .on the record thatthe product 'Appy Fizz' was required 
to be classified ·under Item No.5 of the .Entry 71 as amended, 
with tax liability at 12.5% after amendment by S.R.O. No.119 of 
2008 (now at the rate of 14.5%).[Para 63)'[72-F-H; 73-A] 
Civil Appeal No. 6470 of 2017: 
E 
8. The Civil Appeal No.6470 of 2017. has been filed by the 
Revenue challenging the judgment
of Single Judge and Division 
Bench of High Court by which direction was issued to the 
Committee of the Commissioners to decide the application filed · 
by the appellant under Section 94 of Act, 2003. The Division 
F 
Bench did not commit any e.rror in dismissing'the appeal ·and 
observing that no revisional order of that Court in an earlier 
proceedings could conclude the issues which could be. considered 
in an application for clarification by the competent authority under 
Section 94 of Act, 2003. Thus, there is no error in the judgment G 
of the Single Judge as well as of Division Bench and this appeal 
deserves to be dismissed. [Paras 64, 65) (73-B; 74-A-B] 
Civil Appeal Nos. 6471-72 of 2017: 
9. Civil Appeal Nos. 6471-72 of 2017 have been filed by 
the assessee against an order of Single Judge of High Court by H
, . 
38 
SUPREME COURT REPORTS . 
[2017) 5 S.C.R. 
A which order the Single Judge disposed of the writ petition noting. 
tbe pendency of Civil Appeal Nos;6468-69 of 2017 in this Court 
where classification of the product was under challe~ge. Further 
. B. 
. proceedings in case of the assessee has to be, thus, concluded in 
accordance with the decision in Civil Appeal Nos. 6468-69 of 2017. 
Any amount deposited in pursuance of the interim order of the 
High Court dated 14'h July, 2016 shall abide by the consequential 
orders to be passed in the proceedings against the assessee. 
The Civil App~als .are disposed of with direction that in 
-proceedings against the assessee consequential orders shall be 
passed ineluding an adjustment of·the amount deposited, if 
C necessary, as per the judgment in Civil Appeal Nos. 6468-69 of 
2017. [Paras 66, 67] [74-C, E-H) 
Case· Law Reference 
0(1979) lSCR 545 
D 
relied on 
Para 35 · 
E 
F 
. 1990(47) ELT 161 
997 (96) E.L.T. 219 (SC) 
1997 (89) ELT 16 (SC) 
relied on 
relied on 
relied on 
Para 35 
Para 41 
~ Para 61 
CIVIL APPELLATE JURISDiCTION: Civil Appeal Nos. 6468-
6469 of 2017. 
· 
From the Judgment and Order dated 05.02.2016·in OT Appeal 
No. 07 of2015 andimpugnedrevieworderdated23.03.2016 in RP No. 
172 ofi016 in OTAppeal.No. 07tif2015 of the High Court ofKeraia at 
Emakulam 
'WITH 
C. A. Nos. 64'71-6472 and 6470 o,f 2017. 
. 
· K. K. Venugopal, Arvind P. Datar, Jaideep Gupta, Sr. Advs., Ms. 
G 
L. Chamya, Aditya Bhattacharya,
Premjit Nagendran, Ms. Ashwati 
Balraj, Dharmadhikari, Victor Das, Ms. Lalita Phadke,M. P. Devanath, 
Ramesh Babu M. R., G: Prakash, J~shn'U M. L., Ms. Priyanka Prakash, 
Ms. Beena Prakash, Manu Srinath, Ms: Anindita M., Rajesh Kumar, 
Advs. for the ·appearing parties. 
· · 
H 
. '
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
39 
COMMERCIAL TAXES 
The Judgment of the Court was de.livered by 
A 
ASHOK BHUSHAN, J. 1. Leave granted. 
2. The issues raised in these appeals being Inter-related h1ve been 
:heard.together and the appeals are being disposed ofl;>y this common 
judgment. 
B 
3. Civil Appeals arising out ofSLP(C) Nos. 14697-98 of2016 are 
beirtg treated as leading case, the. facts· of which case shall be noted in. 
· detail for deciding these cases. 
4. Civil Appeals arising out ofSLP(C) Nos. 14697-98 of2016 and. 
' 
( 
r 
· SLP(C) 'No.9467 of 2016 are between the same parties whereas Civil c 
Appeals arising out ofSLP(C) Nos.24460-61 of2016 have been filed by 
different appellants. 
Civil A1meals arisini:; out 2f SLP{C} ~os. 14697-98 of 2016 
5. The appellant-Mis. Parle Agro (P) Ltd. is a dealer engaged in 
fruit juice based drink known as 'Appy Fizz' which has obt(\ined certificate 
D 
of registration under Kerala Value Added Tax Act, 2003 (hereinafter 
referred to as "Act, 2003"). The appellanrwas classifying the product 
as fruit juice based drink under Entry, 71 of the notification issued under 
Section 6(l)(d)'of Act, 2003 till 2007 and was paying@ 12.5% VAT. 
One Mis. Trade Lines (a distributor ofappellant Company) was assessed 
E 
· by the authorities under the Act, 2003 holding that Mis. Trade Lines is 
liable to pay tax @ 20% on the product. M/s. Trade Lines filed OT 
Revision No.114/2013 in the High Court, of Kerala against the order
passed by Kerala Value Added AppellateTribunal dismissing the appeal. 
. The High Court vide its judgment and order dated 17th November, 2014 
dismissed the revision upholding the order passed by. the Assessment F 
Officer and the First AppeI!ate Authority. Special Leave Petition was 
filed by .M/s. Trade Lines again~t ·the judgment of Kerala High Court . 
which was, howevei, permitted to be withdrawn by order dated l 9'h . 
January, 2015 of this Court: On 41h August, 2015 t]fe assessment notices 
were issued to the appellant for Assessment Year 2009-15 proposing 
G 
classification of 'Appy Fizz' under Section 6(1)(a)of the Act, 2003 as 
"aerated branded soft drink" and tax liability@ 20% . After receipt of 
the notices appellant filed an application dated 241h August, 2014 under 
Section 94 of the Act, 2003 seeking clarification of product 'Appy Fizz'. 
In the clarification application the appellant claimed that product' Appy 
H
40 
SUPREME COURT REPORTS 
[2017] 5 S.C.R. 
A 
Fizz' had rightly been clarified as 'fruit juice based drink' and which has 
tax liability of 12.5%. Along with the clarification application appellant 
has filed certificates and expert opinions. Writ Petition No.26279/2015 
was filed by the appellant before Kerala High Court seeking direction to 
the Commissioner of Commercial Taxes to consider and pass order on 
the application for clarification within a specified timeand the proceedings 
initiated by the Commissioner of Commercial Taxes by different notices 
be kept in abeyance. Learned Single Judge by its judgment and order 
dated 31" August", 2015 disposec\ of the writ petition directing the · 
Commissioner ofCoriunercial Taxes to consider and pass orders on the 
clarification application within a period of one month from the date of 
C 
receipt of the judgment and liberty was given to the appellant to produce 
all material on which it intends to place reliance to substantiate its 
clarification with regard to the classification of the product, further 
proceedings in various notices were kept in abeyance. The Assistant 
Commissioner and Commissioner of Commercial Taxes filed a writ 
D 
appeal against the judgment of the learned Single Judge before Division 
Bench of the Kerala High Court. The Division Bench of Kerala High 
Court vide its judgment dated s•h October, 20i 5 dismissed the writ appeal 
by affirming the decision of the learned Single Judge. 
E 
F 
H 
6. After
the above judgment of the Division Bench dated S'h 
October, 2015, the Committee of Joint Commissioner passed the 
clarification order dated 61h November, 2015 classifying the product as 
'aerated branded soft drinks', at the rate of 20%. Against the order 
passed under Section 94 of Act, 2003, the appellant filed O.T. Appeal 
No.7 of 2015 in the Kerala High Court. The Division Bench by its 
judgment and order dated S'h February, 2016 dismissed the appeal filed 
by the appellant upholding the order dated 61h November, 2015. A review 
application was also filed by the appellant to review the judgment dated 
S•h February, 2016 which has been dismissed on 23'ct March, 2016. 
7; CivilApp~als ari~i~g outofSLP(C)No.14697-98 of20l6 have . 
· been filed against the aforesaid order dated S'h February, 2016 and the 
review order dated 23'ct March, 2016 by the appellant. 
Civil Appeal arising out of SLP(C)No.9467 of 2016 
8. The Assistant Commissioner (Assessment) and the 
Commissioner of Commercial Taxes have filed this appeal challenging 
the judgment dated 5th October, 2015 by which writ appeal filed by the
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
41 
COMMERCIALTAXES [ASHOK BHUSHAN, J.] . 
Assistant Commissioner( Assessment) and another against the direction 
A 
of the learned Single Judge dated 31" August, 2015 has been dismissed. 
Civil Appeals arising out of SLP(C)Nos.24460-61 of 2016 
9. Mis. We Six Traders Etc.Etc. is a dealer in fruit juices and 
other drinks manufactured by M/s. Parle Agro (P) Ltd. Assessment 
Commissioner has issued notices forassessment years 2010-11 to 2013- · B 
· 14 and April to June 2015 proposing to classify the product' Appy Fizz' 
as 'aerated branded soft drink'@20%. VAT. After the judgment of the 
·. High Court dated 5'h February, 2016 in the case of Mis. Parle Agro (P) 
Ltd. order of assessment was issued against which the assessee filed . 
appeal before Kerala Value Added Tribunal in which appeal the Tribunal c 
directed the assessee to deposit 30% as pre-condition to hear the matter 
on merits. The assessee filed writ petition in the High Court challenging 
the aforesaid order passed by the Tribunal on the stay petition. The 
assessee submitted before the High Court that against the judgment of 
the High court dated 5•h February, 2016 in the case ofM/s. Parle Agro 
(P) Ltd. SLP has already been filed, hence, the assessee should not 
D 
have been called to remit the entire amount. The High Court vide its 
judgment and order dated .14'h July, 2016 disposed of the writ petiHon 
directing the demand made in the above cases shall remain
stayed till 
disposal of the appeals on condition ofassessee depositing 50% of the 
amount involved. Civil Appeals arising out ofSLP(C)Nos. 24460~61 of E 
2016 have been filed against the aforesaid judgment and order of the 
Kerala High Court dated l 41h July, 2016. 
10. We have heard Shri K.K. Venugopal, learned senior counsel 
for the assessee. Shri J aideep Gupta, learned senior counsel has appeared 
for the Revenue. 
F 
11. Shri K.K. Venugopal, learned senior counsel, submits that both 
High Court and Committee of Commissioners erred in not classifying 
the product of 'Appy Fizz' under Entry 71 of S.R.O.No.119 of 2008. 
Classification of the product as 'aerated branded soft drinks, excluding 
soda' under Section 6(l)(a) is not the correct classification. It is submitted 
G 
that the Revenue itself till 2007 has classified the product under Entry 71 
with tax liability of 12.5%. He submits that judgment of Division Bench 
ofKerala High Court in Mis. Trade Lines cannot be binding precedent 
since the said judgment was rendered in the revision proceedings in 
which appellant was not a party and the revision proceedings were 
H
42 
SUPREME COURT REPORTS 
(2017] 5 S.C.R. 
A 
confined to the assessment order on the basis of facts on the record of . 
that case. Prior to 2007 the product was covered under Entry 71,. When 
in 2008 Entry 71 was amended, there was no amendment to the schedule 
ul}der Section 6(1 )(a). He submits that had the intention of the legislation · 
was to pick up the certain products earlier covered under Entry 71 and 
B 
place them in Schedule under Section 6, then entry 'aerated branded 
soft drinks, excluding soda' which earlier did not cover the said product, 
would also have been amended at the same time. He submits that if 
prior to 2007, 'AppyHzz' could not be considered as an 'aerated branded 
soft drink' then there is no identifiable logic that the product would be so 
covered after 2007. Especially, there was no indication that the said 
C 
prodm;t had been removed/ejected from Entry 71 after the amendment 
in2007. 
12. Further, he submits that common parlance test which has been 
applied by the High Court is not the correct test to determine the 
classification to include the product, as entries under the VAT Act are 
D 
technicalor scientific in nature. Soft drinks under Kerala VAT would be 
those drinks that are synthetic whether or not aerated. The product in 
· question is not a synthetic product. It contains more than 10% fruit juice .. 
It is.fruit juice based drink and not covered by Section 6(1 )(a). A fruit 
juice based drink is more akin to fruit juice than
soft drink. Sub-clause 
E , (5) of Entry 71 covers similar other products not specifically mentioned 
under any other entry in this list or any other schedule. The product is 
fully covered under alone entry. He further submits that Food Safety 
Authorities have recognized the product as a 'fruit drink'. 
13. Shri Venugopal has placed reliance on the order dated 
F 
18.03.2008 of the Customs, Excise and Service Tax Appellate Tribunal 
where classification of the product was upheld as 'fruit based driIJk' and 
the Revenue's appeal was dismissed by this Court' on 18'h July, 2009. 
Shri Vanugopal further submits that neither the Committee of 
Commissioned nor the High Court has adverted to the technical evidence 
and certificate filed by the appellant along with proceedings under Section 
G 
94 of Act, 2003. The scientific evidence fully proved that products do 
not undergo aeration or carbonation; the product is·therffially processed 
with C02 which help in preserving the Apple Juice concentrate.which is 
otherwise perishable in na~e. The certifications ft.illy proved the product 
as 'Thermally processed fruit juice based drink'. 
H
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
43 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
14. Learned counsel further submitted that products which are 
A 
covered under Section 6( 1 )(a) are all those products which are dangerous 
to health. They have deliberately been included on higher tax slab of 
20% and lower tax slab on the products under Entry 71 was with object 
to promote the products under Entry 71. 
15. Shri J aideep Gupta, learned senior counsel, appearing for the 
B 
State ofKerala refuting the submissions ofShri K.K. Venugopal contends 
that High Court has rightly held that product is an 'aerated branded soft 
drink' within the meaning of Section 6( I )(a). He submits that after deletion 
of Entry 71(4) by S.R.O.No.119 of2008 which provided "Fruit pulp or 
fruit based drink", it was clear indication of the legislation that the 'fruit 
C 
based drinks' are out of Entry 7-l and have to be covered into 'aerated 
branded soft drinks' under Section 6(l)(a). He submits that it is not 
disputed that 'Appy Fizz' is a branded drink and further it is aerated by 
C02, hence, it is aerated drink. He submits that amendment of Entry 71 
by S.R.O.No.119 of2008 made the legislative intent clear and the High 
Court has rightly relying on the said amendment has held that product is 
D 
not covered under Entry 71 and is liable to tax@ 20% under Section 
6(l)(a). Learned counsel for the respondent, further, submits that 
CESTAT ruling has no relevance with regard to the
classification under 
Act, 2003, since, the CESTAT ruling considered the different headings 
under Central Excise Tariff Act, 1975 which is not relevant. Learned 
E 
counsel submitted that under the Rules of interpretation as contained in 
the Act, 2003, the product being not covered with any of HSN number 
common parlance or commercial parlance test has rightly been applied 
by the High Court. Under the common parlance even if the product 
contained more than 10% fruit concentrate it is a soft drink as commonly 
known and tax liability@20% has rightly been imposed. 
F 
16. Learned counsel for the parties have placed reliance on various 
cases which shall be referred to while considering the submissi-0ns in 
detail. 
17. We have considered the submissions made by the learned 
G 
counsel for the parties and perused the records. 
18. From the submissions oflearned counsel for the parties and 
the pleadings of the.parties following are the main issues which ~rise for 
consideration in these appeals: 
H
'44 
SUPREME COURT REPORTS 
[2017] 5 S.C.R. 
A 
(I) What is inter-relation between Section 6(J)(a) and Section 
B 
c 
D 
E 
F 
G 
H 
6(J)(d) of Act, 2003? 
(2) What is scope and ambit of Item 5 of Entry 71 as amended ? 
(3) Whether common parlance test is the only test to be applied 
for understanding the different entries under Section 
6(J)(a) and Section 6(1)(d)? 
(4) Principle of Noscitur a Sociis. 
(5) Whether the Division Bench of Kera/a High Court in Mis. 
Trade Lines can preclude the Committee of Joint 
Commissioners to examine the materials filed by the 
appellant along with Clarification Application under 
Section 94. 
(6) 
Whether CESTAT decision dated 18.03.2008 has any 
relevance with regard to theclassification of product in 
question? 
(7) Whether decision and opinion of Food Safety Authorities 
on the product in question were relevant? 
(8) Whether the Committee of Joint Commissioners as well as 
the High Court has rightly discarded technical and expert 
opinion relied by the appellant? 
(9) Conclusions. 
19. Before we proceed to consider the submissions of the learned 
counsel for the parties, it is necessary to look into the statutory scheme 
and the relevant entries prior to amendment by S.R.O.No.119 of2008. 
Section 6 of the Kerala Value Added Tax Act, 2003 provides for levy of 
tax on sale or purchase of goods. Section 6(l)(a) which is relevant for 
the present case as existed before 1 ''April, 2007, was as follows: 
"6(1)(a) in the case of goods
specified in the [Second, and 
Third Schedules] at the rates specified therein and at all points 
of sale of such goods within the State (and in the case of 
goods specified below at the rate of twenty percent, at all 
points of sale of such goods within the State, namely:-
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
45 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
SI. 
Description of goods 
HSN 
A 
No. 
Code 
(1) 
(2) 
(3) 
l. 
Aerated Drinks 
2201.10.10 
B 
(1) Mineral Water 
*** 
(2) Packaged drinking water 
2202.10 
(3) Branded soft drinks, 
8415 
c 
Excluding soda 
2. 
Air conditioners 
3. 
Building Materials 
20. The State by various notifications under Section 6(l)(d) has 
D 
notified list of goods taxable at the rate of 12.5%. Entry 71 which is 
. relevant for the present case as notified by the State as existing prior to 
amendment by the S.R.O.No.119 of2008 is as follows: 
"71. Non-alcoholic beverages and their powders, 
concentrates and tablets including (I) aerated water, soda 
water, mineral water, water sold in sealed containers or 
pouches (ii) fruit juice, fruit concentrate, fruit squash, fruit 
syrup and fruit cordial [x x x] (v) other non-alcoholic 
beverages; not failing under any other entry in this List or in 
any of the Schedule. 
(1) Water not containing added {Ugar or other sweetening 
matter; [xx x] 
(b) Aerated water 
E 
F 
(2) Water containing added sugar or other sweetening-matter. 
2201.10.20 
G 
(3) Fruit juices and vegetables juices, unfermented and not 
containing added spirit, whether or not containing added sugar 
of other sweetening matter 
2009 H
46 
SUPREME COURT REPORTS 
[2017] 5 S.C.R. 
A 
(4) Fruit pulp or fruit juice based drinks 
B 
c 
D 
E 
F 
G 
H 
(5) Soft drink concentrates 
(a) Sharbat 2106.90.11; (b) other 
( 6) Beverages containing milk 
2202.90.30 
2106.90.19 
2202.90.30 
20. The words "(iii) soft drinks ofall varieties" omitted by S.R.0. 
No. 543/2007 dated 20-6-07 published in Kerala Extraordinary 
No.1167 dt. 21.6.07 
21. Omitted by S.R.0. No. 543/2007 dt, 20-6-07 published in 
Kerala Gazette Extraordinary No. 1167 dt.21-6-2007. Prior 
to the omission it read as under: 
"(a) Mineral water 2201.10.10"" 
21. Now, we come to Section 6(l)(a) and (d) which exists as on 
date as: 
"6. Levy of tax on sale or purchase of goods 
(1) Every dealer whose total turnover for a year is not 
less than ten lakhs rupees and every importer or casual trader 
or agent of a non-resident dealer, or dealer in jewellery of 
gold, silver and platinum group metals or silver articles or 
contractor or any State Government, Central Government or 
Government of any Union Territory or any department thereof 
or any local authority or any autonomous body or any multi-
level marketing entity, their distributor and/or agent engaged 
in mu/ti-level marketing, whatever be his total turnover for 
the year, shall be liable to pay tax on his sales or purchases 
of goods as provided in this Act. The liability to pay tax shall 
be on the taxable turnover,-
(a) in the case of goods specified in the Second and Third 
Schedules at the rates
specified therein and at all points 
of sale of such goods within the State and in the case of 
goods specified below, mentioned in column (4), at all 
points of sale of such goods within the States namely;

MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
47 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
S.No. 
Description of Goods 
HSN 
Rates of 
A 
Code 
Tax in 
percentage 
(1) 
(2) 
(3) 
(4) 
{30} 
B 
1. 
Cigars, Cheroots, cigarillos 
2402 
and cigarattes, of tobacco or pf 
tobacco substitutes 
2. 
Aerated branded soft drinks, 
*** 
20 
c 
excluding soda 
3. 
{Carry bags made ofp/astic 
*** 
20 
including polypropylene, which 
have a vest type self carrying 
feature to carry commodities} 
D 
{3A. 
Disposable plates, cups and 
*** 
20} 
leaves, made ofplastic 
1 {including Styrofoam and 
Styrofoam sheets] 
E 
[3B. 
Printed banners, hoardings 
*** 
20} 
and leaflets of Poly Vinyl 
Chloride/Polyethylene and 
other plastic sheets] 
F 
4. 
Pan Masala 
2106. 90.20 
22.5 
G 
5. 
Churnajor pan 
2106.90. 70 
22.5 
6. 
Pan chutney 
••• 
22.5 
H
48 
A 
7. 
B 
SUPREME COURT REPORTS 
[2017] 5~.C.R. 
. 
Other manufactured tobacco 
2403 
22.5 
and manufactured tobacco 
substitutes homogenized or 
reconstituted tobacco; tobacco 
-· 
extracts and essences 
Explanation: The 'Rules of Interpretation of the Schedules' 
appended to the Schedules of this Act shall apply to the 
interpretation of the HSN codes mentioned in this clause. 
xxx 
xxx 
xxx 
xxx 
(d) 
in the case of goods not falling under clause (a) or (c) at 
the rate of 14.5% at all points of sale of such goods 
within the State, Government may notifY a list of goods 
taxable at the rate of 14.5%;" 
D 
22. A legislative history of Section 6( 1 )(a) clearly indicates that 
Section 6( 1 )(a) always covered 'aerated branded soft drinks' excluding 
soda' with tax liability of20%. 
23. By S.R.O.No.119 of2008 Entry 71 has been substituted by 
another Entry. Entry 71 after amendment by S.R.O.No.119 of2008 w.e.f. 
E 
l '' April, 2007 is as follows: 
F 
"NON-ALCOHOLIC BEVERAGES AND THEIR POWDERS, 
CONCENTRATES AND TABLETS IN ANY FORM 
INCLUDING; 
(1) Aerated water, soda water, Mineral water, water sold in 
sealed containers or pouches. 
(2) Fruit juice, fruit concentrates, fruit squash, fruit syrup 
and pulp, and fruit cordial. 
(3) Soft drinks other that aerated branded soft drinks. 
G 
(4) Health drinks of all varieties. 
(5) 'Similar other products not specifical~v mentioned under 
any other entry in this list or any other schedule'." 
24. As noted above the application
was filed by the appellant under 
Section 94 of Act, 2003 on 24'h August, 2014 which has been decided by 
H
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
49 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
the Committee of Joint Commissioner by order dated 61h November, 
A 
2015. Section 94 of the Act, 2003 is as follows: 
"Section 94. Power of Authority to issue clarification.- (1) Jf 
any dispute arises, otherwise than in a proceedings before 
any appellate or revisional authority or in any court or 
tribunal, as to whether, for the purpose of this Act, -
B 
(a) any person is a dealer; or 
(b) any transaction is a sale; or (c) any particular dealer is 
required to be registered; or 
(d) any tax is payable in respect of any sale or purchase, or if C 
tax is payable, the point and the rate thereof; or 
(e) any activity carried out in any goods amounts to or results 
in the manufacture of goods; 
such dispute an authority consisting of three officers in the 
D 
rank of Joint Commissioner or Deputy Commissioner 
nominated by the Commissioner on application by a dealer 
or any other person. 
(JA) if the dispute relates to the tax rate of a commodity, 
the details of the first seller, or the manufacturer of such goods 
E 
in the State, as the case may be, shall be furnished by the 
applicant and they shall be made necessary parties to such 
application. 
(2) The Authority shall decide the question after giving the 
parties to the dispute a reasonable opportunity to put forward 
F 
their case and produce evidence and after considering such 
evidence and hearing the parties. Pass orders within
three 
months or within such time as may be extended by the 
Commissioner. The Commissioner may considering the fact in 
issue decide whether such orders have prospective operation 
on/~ 
G 
25. We, thus, have to examine the classification of product in the 
light of provisions of Section 6( 1 )(a) and Entry 71 as existing after 1 '' 
H
so 
SUPREME COURT REPORTS 
[2017] S S.C.R. 
A 
April, 2007. 
B 
c 
Issue Nos.I and 2 
26. We consider both the issues together. According to Section 
6( l) liability to pay tax shall be on the taxable turnover of every dealer 
as enumerated in sub-clause (a) to sub-clause (f). Sub-clause (a) provides 
that in the case of goods specified in the Second and Third Schedules 
tax shall be liable to be paid at the rate specified therein at all points of 
sale of such goods within the State. Sub-clause (a) further provides that 
in the case of goods specified in sub-clause (a) tax liability shall be at 
rate of specified in column (4). Sub-clause (a) contains chart which 
includes SI.No., Description of goods, HSN Code and Rate of tax in 
percentage. The rate of tax as mentioned in in Section 6(l)(a) is 20% or 
more. The goods enumerated in Section 6( 1 )(a) are tobacco based goods, 
pan masala, other manufactured tobacco and manufactured tobacco 
substitutes. Other category contains plastic goods and goods made of 
polypropylene, Chloride/ Polyethylene and other plastic sheets. All goods 
D 
enumerated in Section 6(1 )(a) by the Legislature itself indicates that 
higher rate of tax has been fixed for those goods which are harmful for 
environment and health. Aerated branded soft drinks, excluding soda is 
also in the company of the above goods described in Section 6(1)(a). 
Section 6(1)(a) also refers to Schedule I, Schedule II and Schedule III. 
E 
F 
Tax in Schedule I is
exempted and rate in Schedule II is 1 % whereas 
rate of tax in Schedule III is 5% in contrast to legislative policy in fastening 
tax liability at very high level on goods under Section 6( l )(a) is thus clear 
and categorical. Those goods which are not congenial to health and 
environment are charged with higher tax level, which is the purpose and 
object clear from the legislative scheme. 
27. Now we come to Section 6(l)(d). Section 6(1(d) empowers 
the State to notify a list of goods which are taxable at the rate of 12.5% 
(at present at 14.5%) which does not fall under clause (a) and (c). The 
delegated legislative power ofissuing notification to the State Government 
is thus restricted and can be exercised only when goods do not fall under 
G 
Section 6( 1 )(a) or Section 6( 1 )( c ). The State of Kerala exercising its 
delegated legislative power has issued notification under Section 6( 1 )( d). 
H 
28. Now, we proceed to examine the legislative history of both 
Section 6(1)(a) and Entry 71 and the legislative changes effected from
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
51 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
time to time. Prior to substitution of Section 6(1)(a) by Kerala Finance 
A 
Act, 2007 w.e.f. from l ''April, 2007. Section 6(l)(a) read as follows: 
"(a) in the case of goods specified in the [Second, and Third 
Schedules] at the rates specified therein and at all points of sale of 
such goods within the State (and in the case of goods specified 
below at the rate of twenty percent, at all points of sale of such 
B 
goods within the State, namely:-
SI. 
Description of goods 
HSN 
No. 
Code 
(1) 
(2) 
(3) 
c 
1. 
Aerated Drinks 
2201.10.10 
(1) Mineral Water 
*** 
(2) Packaged drinking water 
2202.10 
D 
(3) Branded soft drinks, 
8415 
Excluding soda 
2. 
Air conditioners 
E 
3. 
Building Materials 
29. The aerated branded soft drinks, excluding soda were always 
covered under Section 6(1)(a)and prior to l'' April, 2007 it bears HSN 
F 
Code 2201.10.10. Entry 71Item4 also reads as "fruit pulp or fruit juice 
based drinks with HSN Code 2202.90.20". When fruit juice based drinks 
were covered under Entry 71 the State Government knew that fruit 
juice based drinks were not covered by Section 6( 1 )(a}: Applicability of 
the power of State to issue notification under Section 6( 1 )( d) arises only 
G 
when goods were not covered by Section 6( 1 )(a). Fruit juice based drinks, 
thus, were never treated as 'aerated branded soft drinks' which was the 
understanding of State ofKerala while issuing
notification under Section 
6(l(d). Had fruit juice based drinks were also to be covered by aerated 
branded soft drinks, there was no occasion for subordinate legislative 
H 
•
52 
SUPREME COURT REPORTS 
[2017) 5 S.C.R. 
A 
authority, i.e., the State Government, to include such products in 
notification under Section 6( l )( d). 
B 
30. Now, we come to Entry 71 which was substituted by S.R.O. 
No.119 of 2008 dated 24.1.2008 w.e.f. 01.04.2007, which is to the 
following effect: 
''71. Non-alcoholic beverages and their powders, 
concentrates and tablets in any form including: 
(1) aerated water. soda water, mineral water, water sold in 
sealed containers or pouches; 
C 
(2) Fruit juice, fruit concentrates, fruit squash, fruit syrup 
and pulp and fruit cordial; 
D 
E 
(3) Soft drinks other than aerated branded soft drinks: 
(4) Health drinks of all varieties; 
(5) Similar other products not specifically mentioned under 
any other entry in this list or in any other Schedules." 
31. A bare perusal of Entry 71 as above indicates that the Entry 
covers non-alcoholic beverages and their powders, concentrates and 
tablets in any form including - Item No.2 contains fruit juice, fruit 
concentrates, fruit squash, fruit syrup and pulp and fruit cordial. Soft 
drinks other than aerated branded soft drinks are included in Item No.3. 
Health drinks of all varieties are included in Item N o.4 and similar other 
products not specifically mentioned under any other entry in this list or in 
any other Schedules were included in Item No. 5. The Entry of fruit juice 
based drinks got subsumed in the residuary entry and the amendment by 
F 
S.R.O. No.119 of2008 did not
change or affect the character and content 
of the products which were included in Entry 71. 
Issue No.3 
32. The High Court while interpreting the entries under Section 
6(1){a) andEntry71 of the notification S.R.O.No.119 of2008 had applied 
G 
common parlance test. The High Court has also relied on Rules of 
Interpretation as contained in the Appendix to Schedule to Act, 2003. 
From the Appendix following Rule of Interpretation was extracted: 
"RULES OF INTERPRETATION OF SCHEDULES 
H 
The commodities in ihe schedules are allotted with Code
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
53 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
Numbers, which are developed by the International Customs 
A 
Organization as harmonized System of Nomenclature (HSN) 
and adopted by the Customs Tariff Act, 1975. However, there 
are certain entries in the schedules for which HSN Numbers 
are not given. Those commodities which are given with HSN 
Number should be given the same meaning as given Customs 
B 
Tariff Act, I975. Those commodities, which are not given with 
HSN Number, should be interpreted, as the case may be, in 
common parlance of commercial parlance. While interpreting 
a commodity, if any consistency is observed between the 
meaning of a commodity without HSN Number and the 
meaning of a commodi~y with HSN Number, th« commodity 
C 
shOuld be interpreted by including it in that entry which is 
having the HSN Number. " 
33. Applying the common parlance test, the High Court has 
concluded that product in question is covered by 'aerated branded soft 
drink'. Strictly speaking the Rule oflnterpretation which is given in the 
D 
Appendix to Act, 2003, are the Rules of Interpretation of Schedules that 
is Schedule Nos.I, II and III. Thus, for interpretation of any item in the 
Schedule, Rules oflnterpretation as given in the Appendix are applicable. 
The items which fall for consideration in the present case is Item 
No.6(l)(a) as well as Entry 71 of S.R.O. No.119 of 2008 issued in 
exercise of power under Section 6(1)(d), which
are the entries which 
E 
are not mentioned in the Schedule. One more provision which is relevant 
to notice is the explanation to Section 6(1)(a). The explanation to Section 
6(1 )(a) provides as follows: 
"Explanation: The 'Rules of Interpretation of the Schedules' 
appended to the Schedules of this Act shall apply to the F 
interpretation of the HSN codes mentioned in this clause. " 
34. Although the above Explanation applies the Rules of 
Interpretation of the Schedules to the interpretation of the HSN codes 
mentioned in Section 6( I )(a) but Explanation does not say anything about 
the items where HSN code is not there. The Rules oflnterpretation of G 
the Schedules, thus, directly are not attracted with regard to the 
interpretation of the entry which does not mention with HSN code in 
Section 6(1)(a) although principle contained in such Rules of 
Interpretation may apply. Had the legislation intended the Rules of 
Interpretation of the Schedules should be made applicable both to the 
H
54 
SUPREME COURT REPORTS 
[2017] 5 S.C.R. 
A 
interpretation of the Schedules or those commodities which are not given 
with HSN code, the Rules of Interpretation of Schedules should have 
been in toto made applicable for interpretation of clause (a) of Section 
6(1). Thus, common parlance test or commercial test which are to be 
applied on the commodities in the Schedules which are not given with 
B 
c 
D 
E 
F 
G 
H 
HSN code is directly not applicable under Item 6( 1 )(a), hence, applicability 
of other Rules of Interpretation which were required to be applied is not 
ruled out. Hence, in the appropriate case apart from common parlance 
test or commercial test any other test can be applied for interpretation of 
the commodities included in Section 6( 1 )(a) apart from those which are 
given HSN code. 
35. The principle of statutory interpretation with regard to a word 
in taxing statutes are well established. This Court in Porritts & Spencer 
(Asia) Ltd. vs. State of Haryana, 1979(1) SCC 82, has laid down 
following in paragraph 6: 
"6 •.... Where a word has a scientific or technical meaning and 
also an ordinary meaning according to common parlance, it 
is in the latter sense that in a taxing statute the word must be 
held to have been used, unless contrary intention is clearly 
expressed by the Legislature. " 
36. This Court had also occasion to interpret the entries in taxing 
statute which has also technical meaning. In this context, reference is 
made to judgment of
this Court reported in Collector of Akbar 
Badruddin Jiwani vs. Collector of Customs, 1990(47)ELT 161,the 
Court had occasion to consider a term as occurring in Tariff Item No.25.15 
of Appendix I-B, Schedule 1 to the Import (Control) Order, 1955. The 
Court held commercial nomenclature or trade understanding inapplicable 
to the term. While considering the aforesaid case the Court had occasion 
to consider several earlier cases of this Court. Following was stated in 
paragraphs 36,37,40,41,42, 43: 
"36. In deciding this question the first thing that requires 
to be noted is that Entry 2 5.15 refers specifically not only to 
marble but also to other calcareous stones whereas Entry 62 
refers to the restricted item marble only. It does not refer to 
any other stones such as ecaussine, travertine or other 
calcareous monumental or building stone of a certain specific 
gravity. Therefore, on a plain reading of these two entries it
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
55 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
is apparent that travertine, ecaussine and other calcareous 
monumental or building stones are not intended to be included 
in 'marble' as referred to in Entry 62 of Appendix 2 as a 
restricted item. Moreover, the calcareous stones as mentioned 
A 
in ITC Schedule has to be taken in scientific and technical 
sense as therein the said stone has been described as of an 
B 
apparent specific gravity of 2.5 or more. Therefore, the word 
'marble' has to be interpreted, in our considered opinion, in 
the scientific or technical sense and not in the sense as 
commercially understood or as meant in the trade parlance. 
There is no doubt that the general principle of interpretation 
of tariff entries occurring in a text (sic tax) statute is of a 
commercial nomenclature and understanding between persons 
in the trade but it is also a settled legal position that the said 
doctrine of commercial nomenclature or trade understanding 
should be departed from in a case where the statutory content 
c 
in which the tariff entry appears, requires such a departure. 
D 
In other words, in cases where the application of commercial 
meaning or trade nomenclature nms counter to the statutory 
context in which the said word was used then the said principle 
of interpretation should not be applied. Trade meaning or 
commercial nomenclature would be applicable if a particular 
product description occurs by itself
in a tariff entry and there · E 
is no conflict between the tariff entry and any other entry 
requiring to reconcile and harmonise that tariff entry with 
any other entry. 
37. In Union of India v. Delhi Cloth & General Mil!sl 
the question arose as to how the term "refined oil" occurring 
in the tariff was to be construed. There was no competition 
between that tariff entry with any other, nor was there any 
need to reconcile and harmonise the said entry with any other 
provision of the tariff. This Court, therefore, considered the 
term "refined oil" by applying the commercial meaning or 
trade nomenclature test and held that only deodorised oil can 
be considered to be refined-oil. This Court also referred to 
the specification of "refined oil" by the Indian Standards 
Institution and held that: 
"This specification by the Indian Standards Institution 
F 
G 
H
56 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2017) 5 S.C.R. 
furnishes very strong and indeed almost incontrovertible 
support for Dr Nanji s view and the respondents' 
contention that without deodorisation the oil is not "refined 
oil" as is known to the consumers and the commercial 
community. " 
40. It may be pointed out that this Court has clearZv and 
unequivocalZv laid down that it is not permissible but in fact 
it is absolutely necessary to depart from the trade meaning or 
commercial nomenclature test where the trade or commercial 
meaning does not fit into the scheme of the commercial 
statements. This Court referring to the observation of Pullock, 
B. in Grenfell v. Inland Revenue Commissioner-0bserved: 
(quoted at SCR p. 724) 
"that if a statute contains language which is capable of 
being construed in a popular sense such statute is not to 
be construed according to the strict or technical meaning 
of the language contained in it, but is to be construed in 
its popular sense, meaning of course, by the words 'popular 
sense', that sense which people conversant with the subject 
matter with which the statute is dealing would attribute to 
it." But "if a word in its popular sense and read in an 
ordinary way is capable of two constructions, it is wise to 
adopt such a construction as is based on the assumption 
that Parliament merely intended to give so much power as 
was necessary for carrying out the objects of the Act and 
not to give any unnecessary
powers. In other words, the 
construction of the words is to be adapted to the fitness of 
the matter of the statute. " 
41. The court has also referred to the observation of 
Fry, J. in Holt & Co. v. Collyer. The observation is: "If it is 
a word which is of a technical or scientific character then 
it must be construed according to that which is its primary 
meaning, namely, its technical or scientific meaning. " 
Referring to the above decisions this Court held that: 
"[W}hi/e construing the word 'coal' in Entry I of Part Ill of
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
57 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
Schedule II. the test that would be applied is what would be 
A 
the meaning which persons dealing with coal and consumers 
purchasing it as fuel would give to that word. A sales tax 
statute being one levying a tax on goods must in the absence 
of a technical term or a term of science or art, be presumed to 
have used an ordinary term as coal according to the meaning 
B 
ascribed to it in common parlance. " 
42. This Court in K. V. Varkey v. Agricultural Income Tax 
and Rural Sales Tax Officer specifically declined to apply 
the popular or commercial meaning of 'Tea' occurring in the 
sales tax statute holding that the context of the statute required 
that the technical meaning of 'a product ofplaint life' required C 
to be applied and therefore green tea leaves were tea even 
though they migh,t not be tea as known in the market. 
43. In Cannanore Spinning and Weaving Mills Ltd. v. 
Collector of Customs and Central Excise, Cochin this Court 
held that the word 'hank' occurring in a Central Excise D 
Notification could not be interpreted according to the well 
settled commercial meaning of that term which was accepted 
by all persons in the trade, inasmuch as the said commercial 
meaning would militate against the statutory context of the 
said exemption notification issued in June 1962. The word E 
'hank' as used in the notification meant a 'coil of yarn' and 
nothing more. " 
37. In the
cases as noted above this Court departed from construing 
the entry from its normal commercial meaning but had adopted a technical 
or scientific meaning. Ultimately, in paragraph 53 of this judgment, the 
F 
Court gave the technical and scientific meaning to the entry and common 
parlance and commercial parlance test was not adhered to: 
"53. It is apparent from all these reports that the calcareous 
stone of specific gravity of 2.5 is not marble technically and 
scientifically. The finding of the Appellate Tribunal is, 
G 
therefore, not sustainable. It is, of course, well settled that in 
taxing statue the words used are to be understood in the 
common parlance or commercial parlance but such a trade 
understanding or commercial nomenclature can be given only 
in cases where the word in the tariff entry has not been used 
H
58 
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[2017] 5 S.C.R. 
A 
in a scientific or technical sense and where there is no conflict 
between the words used in the tariff entry and any other entry 
in the Tariff Schedule. " 
38. In the present case, the Entry 2 under Section 6(l)(a) uses 
the word 'aerated'. This is scientific tenn and has been repeatedly used 
B . in different statutes including the Central Excise Tariff and different 
HSN codes also uses the tenn 'aerated'. The word 'aerated' is scientific 
and technical word used under different statutes a.nd the scientific and 
technical meaning of the word 'aerated' can be looked into for finding 
out the real import of the Entry. 
c 
D 
39. In view of the above, we are of the opinion that common 
parlance and commercial parlance test was not the only test which could 
have been applied for interpreting the entries in items mentioned in Section 
6(l)(a)and the entries which contain scientific and technical word were 
also to be looked into in technical and scientific meaning. Both the High 
Court and the Committee of Joint Commissioners discarded the evidence 
of technical and scientific meaning of word. The appellant has rightly 
relied on the technical evidence brought on the record which indicate 
that use of carbon dioxide to the extent of0.6 per cent was only for the 
purpose of preservative in packaging the commodities and the product 
was thermally processed and carbon dioxide was added to as the· 
E 
preservative. 
Issue No.4:
Principle of 'Noscitur a Sociis' 
40. The appellants before the Committee of Commissioners as 
well as High Court have pleaded that Entry 71 Item 5 mentioned "similar 
other products not specifically mentioned under any other entry in this 
F 
list or any other schedule", was required to be considered in the light of· 
commodities as included in other items mentioned in Entry 71. It was 
submitted that 'Appy Fizz' which a fruit juice based drink is more akin to 
other commodities included in the Entry 71 other than that which was 
included in Section 6(1 )(a). In interpreting Item 5 ofEntry 71 the doctrine 
G of 'noscitur a sociis 'is fully attracted. Justice GP.Singh in 'Principles 
·of Statutory Interpretation, 14'h Edition, has explained the 'noscitur a 
sociis 'in the following words: 
"(b)Noscitur a Sociis 
The rule of construction noscitur a sociis as explained 
H 
by LORD MAC-MILLAN means: "The meaning of a word is
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
59 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.) 
to be judged by the company it keeps". As stated by the Privy A 
Council: "It is a legitimate rule of construction to construe 
words in an Act of Parliament with reference to words found 
in immediate connection with them". It is a rule wider than 
the rule of ejusdem generis; rather the latter rule is only an 
application of the former. The rule has been lucid~v explained B 
by GAJENDERAGADKAR, J., in the following words: "This 
rule, according to MAXWELL, means that when two or more 
words which are susceptible of analogous meaning are 
coupled together, they are understood to be used in their 
cognate sense. They take as it were their colour from each 
other, that is, the more general is restricted to a sence 
analogous to a less general. The same rule is thus interpreted c 
in Words and Phrases." "Associated words take their meaning 
from one another under the doctrine of noscitur a sociis, the 
philosophy of which is that the meaning of the doubtfi1l word 
may be ascertained by reference to the meaning of words 
associated with it; such doctrine is broader than the maxim 
ejusdem generis." In fact the latter maxim "is only an 
illustration or specific application of the broader maxim 
noscitur a sociis '. It must be boren in mind that noscitur a 
sociis, is merely a rule of construction and it cannot prevail 
in cases where it is. clear that the wider words have been 
deliberately
used in order to make the scope of the defined 
· word correspondingly wider. It is only where the intention of 
the Legislature in associating wider words with words of 
narrower significance is doubtfit!, or otherwise not clear that 
the present rule of construction can be usefi1lly applied. " 
41. This Court in Pardeep Aggarbatti Vs. State-of Punjab, 1997 
(96) E.L.T. 219(S.C.), considering Entry 16 of Schedule A of Punjab 
General Sales Tax Act, 1948, in paragraph 9 has laid down following: 
"9. Entries in the Schedules of Sales tax and Excise 
statutes list some articles separately and some articles are 
grouped together. When they are grouped together, each word 
in the Entry draws colour from the other words therein. This 
is the principle uf noscitur a suciis." 
42. Applying the aforesaid principle of construction of 'nostitur 
a sociis' on Entry 71, it is clear that clause 5 of Entry 71 has to take 
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[2017] 5 S.C.R. 
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colour and meaning from the other items included in Entry 71. Item 5 of 
Entry 71 uses the words "similar other products not specifically mentioned 
under any other entry in this list or any other schedule". Thus, the products 
which are to be covered under Item No.5 are similar other products. 
When Item No.2 of the Entry 71 that is fruit juice, fruit concentrates, 
B 
c 
fruit squash, fruit syrup and pulp, and fruit cordial and item No.4 that is 
health drinks of all varieties, are kept in mind the fruit juice based drink 
shall fall in Item No.5. Both High Court and Committee of Commissioners 
overlooked this principle while interpreting item No.5 of Entry 71. 
Issue No.5 
43. The appellant in application under Section 94 of the Act, 2003 
filed several materials, expert opinions and pleadings for classifying the 
product in question. The Committee of Commissioners although in its 
. order has noted several contentions raised by the appellant but the 
Committee of Commissioners mainly relying on the judgment ofDivision 
Bench ofKeralaHigh Court in OT Revision No.114 of2013-M/s. Trade 
D 
Lines finalised the assessment by levying tax on the product 'Appy 
Fizz' at the rate of 20% against which Mis. Trade Lines has filed an 
appeal which was dismissed and thereafter Revision was filed in the 
High Court and the High Court dismissed the Revision affirming the 
assessment made at the rate of 20% tax. Proceeding under Section 94
E 
F 
of Act, 2003 is a separate and specific proceeding. In the present case 
when the appellant has filed application under Section 94 the judgment 
of Division Bench in Mis. Trade Lines was already rendered and in a 
writ petition filed by the appellant learned Single Judge has issued a 
' direction on 31" August, 2015 for deciding the application under Section 
94. The direction issued by the learned Single Judge to decide the 
application was challenged by the Revenue before the Division Bench 
and the Division Bench contending that Single Judge ought not to have 
issued the direction since the matter had been decided in the High Court 
in Mis. Trade Lines (supra). The Division Bench rejected the said 
contention and dismissed the writ appeal on 1 s•h October, 2015 and in 
G 
paragraph 4 of the judgment has dealt with the judgment of Mis. Trade 
Lines to the following effect: 
4 .... The so-called revisional order passed by this Court in 
yet another case would not also have the efficacy of depleting 
the jurisdiction of the authority under Section 94 of the KVAT 
H 
Act. to issue clarification. The very purpose of the provision
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
61 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
in the form of Section 94 and clothing authority with power 
A 
to make different nature of considerations to conclude such 
issues, necessarily, show that no revisional order of this Court 
in an earlier proceedings could concluae the issues which 
could be considered in an application for clarification by the 
competent authority under Section 94 of the KVAT Act." 
44. The order passed by the Division Bench in Mis. Trade Lines 
was a case of assessment of another assessee which decision was based 
on the materials brought on the record by the said assessee and could 
not have precluded the appellant from filing the application under Section 
B 
94 and when the Division Bench by its judgment of 51h October, 2015 
dismissed the appeal of the Revenue, the Committee of Commissioners 
C 
ought to have followed the observation given by the Division Bench in 
paragraph 4 quoted above. Thus, we are of the view that the judgment 
of the Division Bench ofKerala High Court in M/s. Trade Lines did not 
conclude the issue and the Committee of Commissioners was not absolved 
from its duty of deciding the same in accordance with the materials 
D 
brought on the record by the appellant and although the Committee noticed 
all the pleadings and contentions but mainly relying on the ruling ofM/s. 
Trade Lines dismissed the clarification application which cannot be 
sustained. 
Issue No.6. 
45. Appellant
had relied on the order of CESTAT dated 18.03 .2008 
reported in 2008 (226) ELT l 94(Tribunal-Delhi) which was in appeal 
filed by the Commissioner of Central Excise, Bhopal against the Mis: 
E 
Parle Agro Pvt. Ltd. regarding classification of the same product' Appy 
Fizz' and the order passed by the Commissioner(Appeals) whereby it 
F 
was held that product 'Appy Fizz' is classifiable under sub-heading 
No.22029020 of Central Excise Tariff on the ground that the product is 
fruit juice based drink. Revenue challenged the order on the ground that 
the same is classifiable under sub-heading No.220210 I 0 of Central Excise 
Tariff as 'aerated water'. The Tribunal vide its judgment dated 18.03 .2008 
dismissed the appeal. The order in paragraph 5 has referred to relevant 
G 
sub-heading No.220210 and 22029020 on which Revenue had relied is 
to the following effect: 
"2202 JO 
Waters, including mineral waters and 
aerated waters, containing added 
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SUPREME COURT REPORTS 
[2017] 5 S.C.R. 
22029020 
sugar or other sweetening matter 
or flavoured: 
Fruit pulp or fruit juice based 
drinks" 
46. The Revenue has contended that product in question is aerated. 
The contention of the Revenue was noted in paragraph 3 of the judgment 
which is to the following effect: 
"3. The contention of the Revenue is that the Commissioner 
(Appeals) has ignored the chemical examiners report and 
Ministry of Food and Processing Industries opinion and which 
was on record and Ministry of Food and Processing Industries 
opinion and which was on record and held in favour Of the 
respondents. The contention of the Revenue is that since the 
product in question is aerated,therefore, is classifiable as 
flavoured aerated water. The Revenue also relied upon the 
HSN Explanatory notes in support of their claim." 
47. The above contention was rejected by the CESTAT and 
. following was held in paragraph 6: · 
"6. The Revenue relied upon HSN Explanatory Notes of 
Chapter 22. WE find that our tariff is not ji1/ly aligned with 
the HSN Explanatory Notes. In the HSN Explanatory Notices 
there are two sub-headings under Heading No.2202 one is 
"water including mineral waters and aerated waters, 
containing added sugar or other sweetening matter or 
flavoured" and second is in respect of others. Whereas Central 
Excise Tariff under Sub-heading No.2202 there are specific 
headings in respect of soya milk, drinks etc. As per the
Central 
Excise Tariff, the waters; including mineral waters and aerated 
waters, containing added sugar or other sweetening matter 
or flavoured are classifiable under sub-heading No.2202.10. 
The drinks based on fruit juice are specifically classifiable 
under Heading No.22029020 of the Tariff. In the present case, 
there is no dispute regarding the contents of the product. 
Revenue is not disputing the certificate given by the Ministry 
of Food and Processing Industries, New Delhi rather they 
are relying it in the ground of appeal, and as per the certificate, 
the product in question contains 23% of apple juice, therefore,
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
63 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
we find no infirmity in the impugned order. The appeal is 
A 
dismissed. " 
48. The Revenue had also filed Civil Appeal No.5354 of 2008 
against the order ofCESTAT which was dismissed by this Court on 81h 
July, 2009 affirming the order ofCESTAT. 
49. The judgment ofCESTAT and the order of the Supreme Court 
B 
were specifically relied by the appellant before the High Court. The 
High Court without giving cogent reason has refused to rely on the said 
adjudication. It may be said that the adjudication by the CESTAT was 
with regard to the HSN Code which found place in Central Excise Tariff 
Act. The competent entry under which CESTAT authorities were to c 
adjudicate regarding the product has already been extracted ''Fruit pulp 
or Fruit juice based drink" on which CESTAT had ruled that product is 
not included in aerated water and was included in entry as fruit juice 
based drink. The product was not held to be aerated water was a relevant 
fact to be considered even though in the entries under the Act, 2003, 
now there are no HSN Codes mentioned. 
D 
50. Even though the order of CESTAT did not conclude the 
controversy in favour of the appellant but fact that the CESTAT did not 
hold the product to be under the "aerated water" was a factor which 
necessitated a more deeper consideration by the High Court to find out 
as to whether the product is 'aerated branded soft drink' or not. The
High Court in its judgment found that since the product charged with air 
or carbon dioxide was an aerated drink. From the manufacturing process 
which was on the record, it is clear that carbon dioxide to the extent of 
0.6 percent was added as preservative. Technical note submitted on 
behalf of the appellant clearly mentioned that use of carbon dioxide was 
only as a preservative of' Appy Fizz'. 
Issue Nos. 7 & 8 
51. The appellant had been granted the licence to manufacture 
E 
F 
the product under Fruit Products Order 1955. The appellant has been 
labelling the product as 'Fruit Drink' under the Food Safety and Standards 
G 
(Food Safety & Standards and Food Additives) Regulations, 2011. The 
statutory regulations require that beverages must contain minimum of 
10% fruit juice to be called a Fruit Drink. Regulation 2.3.10 of 2011 
Regulations described as 'Thermally Processed/Fruit Beverages/ Fruit 
Drink ready to serve Fruit Beverages to the following effect: 
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SUPREME COURT REPORTS 
[2017] 5 S.C.R. 
"2.3.10: Thermally Processed Fruit Beverages/Fruit Drink/ 
Ready to Serve Fruit Beverages 
I. Thermally Processed Fruit Beverages/Fruit 
Drink/ Ready to Serve Fruit Beverages (Canned, Bottled, 
Flexible Pack And /Or Aseptically Packed) means an 
unfermented but fermentable product which is prepared from 
juice or Pulp/Puree or concentrated juice or pulp or sound 
mature fruit. The substances that may be added to fruit juice 
or pulp are water, peel oil, fruit essences and flavours, salt, 
sugar, invert sugar, liquid glucose, milk and other ingredients 
appropriate to the product and processed by heat, in an 
appropriate manner, before or after being sealed in a 
c'ontainer, so as to prevent spoilage. 
2. The product may contain food additives permitted in 
these regulations including Appendix A. The product shall 
conform to the microbiological requirements given in Appendix 
B. The product shall meet the following requirements:-
(i) Total Soluble Solid (m/m) Not less than 10.0 percent 
(ii) Fniit Juice content (m/m) 
(a) Lime/Lemon ready to serve beverage Not less than 5.0 
percent 
(b) All other beverage/drink Not less than 10.0 percent · 
52. It is on the record that the contents of food product of 'Appy 
F 
Fizz' are more than 10%. In Section 94 proceedings the appellant has 
filed letter of the Government oflndia dated 28.03.2005 containing the 
"Subject : Opinion for the product as 'Appy Fizz'". In the letter
the 
Government stated the following: 
"This is with reference to your letter No. KS-DEL-PAL dated 
G 
41h March, 2005 on the above mentioned subject. There are 
three categories of products specified under the Fruit Products 
Order, 1955 which are relevant to your products. 
H 
1. 
Readj1 to serve beverages including aerated waters 
containing Fruit Juice. The product should contain a
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
65 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
minimum of 10% of fruit juice. The product is commonly 
A 
known as fruit drink. 
2. 
Flavored sweetened aerated waters. The produ~t which 
contains less than 10% of .. sic.. & vegetable extractives 
is included in this category. The product is commonly 
known as soft drink such as Pepsi Cola, Coca Coin etc. 
B 
3. 
Sweetened aerated mixturescontaining fruit juice or bits. 
The product should contain a maximum of 10% of fn1it 
juice or pulp or bits. This category of product technically 
is same as at serial no.1. " 
53. Thus, according to the Government oflndia, Ministry of Food 
C 
Processing Industries the product containing l 0% of fruit juice are 
commonly known as fruit drinks. The appellant has also filed the order 
of 19'h August, 2015 issued by the Food Safety and Standards Authority 
oflndia, Ministry ofHealth & Family Welfare where following permission 
was granted by Food Safety and Standards Authority of India, Ministry 
D 
of Health & Family Welfare by order dated l 9'h August, 2015: 
"It is to inform you that you are now allowed to Manufacture, 
Store and Sale the product 'Appy Fizz' in pet bottles under 
the category2.3.JO i.e. Thermally Processed Fruit Beverages/ 
Fruit Drink/Ready to serve Fruit Beverages of Food Safety 
an'd Standards (Food Product Standards & FoodAdditives) 
Regulations, 2011 with name of the food item as Fruit Pulp 
or Fruit Juice based Drinks for which
you are already holding 
a license. " 
54. The Committee of the Joint Commissioners while deciding 
the application under Section 94 has noted the aforesaid orders passed 
,by the Food Safety Authorities which were relied by the appellant but it 
discarded the above said orders and opinion relying on the order passed 
by the Kerala High Court in the case of Mis. Trade Lines decided on 
17.11.2014 and held that the product is taxable at the rate of20% as per 
SI. No. 2 of Section 6(l)(a). 
55. What is the process for manufacture in accordance with the 
Food Safety and Standards Act, 2011 and the Regulations framed therein 
and what is the nature and characteristic of th~ product which has been· 
licensed to be manufactured to the appellant cannot be said to be an 
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SUPREME COURT REPORTS 
[2017] 5 S.C.R. 
irrelevant factor while examining the nature and contents of the product. 
Whether the product is an aerated branded soft drink or can be covered 
by residuary of clause (5) of Entry 71 is a question on which the 
manufacture licence, orders issued by Food Safety and Standards 
Authority oflndia were relevant facts which were although cited before 
the Committee of Joint Commissioners but were brushed aside relying 
on the Kerala High Court's order in Mis. Trade Lines. We, thus, are of 
the opinion that the manufacture licence dated l 9'h August, 2015 granted 
to appellant and the opinion of the Government of India, Ministry of 
Food Processing Industries dated 28.03.2005 were relevant for finding 
the natµre of the product of the appellant for the purpose of classification 
and the Committee of Joint Commissioners as well as High Court erred 
in.not adverting to and considering the aforesaid material. 
56. The appellant has also before the Committee of Joint 
Commissioners produced the technical certificates. The Food Safety 
and Standards (Food Products Standards & FoodAdditives) Regulations, 
D 
2011 in clause 2.3.10 deals with thermally processed fruit beverages/ 
fruit drink ready to serve fruit beverages which has alre11dy been 
extracted above. The appellant has filed a certificate dated 11.06.2015 
from the Institute of Chemical Technology. It is useful to refer to the 
above certificate which is to the following
effect: 
E 
F 
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"INSTITUTE OF CHEMICAL TECHNOLOGY 
ICT/FET/USA/1590 
June 11,2015 
TO WHOMSOEVER IT MAY CONCERN 
Technical opinion on the product 
Appy Fizz manufactured by 
PARLE AGRO PVT LTD. 
Appy Fizz is a fruit product manufactured using apple juice 
concentrate as a fruit juice source. The ingredients declared on 
the label include Water, Sugar, Apple Juice concentrate, Carbon 
dioxide(290), malic acid, citric acid, preservatives( sodium benzoate, 
potassium metabisulphite and potassium, sorbate ), ascorbic acid 
and added nature identical flavouring substances and natural colour. 
The juice content of APPY FIZZ is 12.7% m/m and Total solids 
content is 13%. The product is manufactured under FSSAI licence 
category - Ready to Serve fruit beverage/drink.
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
The manufacturing process involves the following steps:-
1. Addition of all the ingredients to treated water, except carbon 
dioxide and making a batch. 
2. Thermal Process (Pasteurization) of the product at 95° C for 
30 seconds and cooling to 4° C. 
3. Purging Carbon dioxide gas into the product. 
4. Filing the product into bottles/cans followed by sealing/seaming. 
5. Filed bottles/cans are then passed through warmer to increase 
the temperature to room temperature.followed by labeling and 
67 
A 
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coding. 
C 
The technical opinion is given with considering following two points: 
POINT NO. 1: 
Technical Opinion on why the category of the product should be 
FSSAI(Food Product Standards and Food Additives) Regulations, 
D 
2011chapter2.3.lO(Thermally processed Fruit Beverages/Fruit 
drink/Ready to serve fruit beverage) 
• It is made from apple juice concentrate. 
• It compiles with respect to the juice content and solids content 
percentage which is more than 10% required as per the 2.3.10. 
E 
• It mentions CONTAINS APPLE JUICE on the label. 
• It is thermally processed beverage. 
• It has substances mentioned .. sic .. other ingredients appropriate 
to the product. 
• After the Thermal processing the ready .. sic .. as required in 
2.3.l 0 Carbon Dioxide is purged in the beverage FRUITS action 
of preservation to create an environment which will help to 
prevent spoilage during
itselflife. 
POINT NO. 2: 
Technical Opinion on why the category of the product should NOT 
be classified under FSSA (Food Product Standards as Food 
additives) Regulation, 2011 chapter 2.3.30 (Carbonated Fruit 
beverage I drink) OR 2.10.6. l (Carbonated Fruit beverage/drink) 
OR 2.10.6.1 (Carbonated Water) 
F 
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SUPREME COURT REPORTS 
[2017] 5 S.C.R. 
A 
• 
APPY FIZZ is not a synthetic carbonated wate. 
• 
APPY FIZZ contains reconstituted natural apple juice made 
from apple juice concentrate. 
• 
APPY FIZZ is thermally processed (Pasteurization). 
B 
• 
Thermal process is not mentioned in 2.3.30 and 2.10.6.1 
• 
APPY FIZZ are not contain artificial sweeteners/caffeine 
as allowed in 2.10.6.1. 
Carbon dioxide(INS 290/E 290) is mentioned as a Packing 
gas/propellant/carbonating agent/preservative/foaming agent by 
C 
CODEX ALIMENTATIRUs and its use is allowed as per GMP. 
D 
E 
F 
Carbon dioxide along with other preservatives help in 
exteriding the shelf life of the product as the product is filed in 
PET bottles/cans and is not filled aseptically. 
Conclusion: 
In view of the above mentioned points, I am of the opinion 
that the APPY FIZZ is a THERMALLY PROCESSED FRUIT 
BEVERAGE/READY TO SERVE FRUIT BEVERAGE 
complying with category 2.3.10 as per FSSAI Regulations, 2011 
despite having carbon dioxide as an ingredient which is used for 
preservation purpose only. This opinion is purely based on scientific 
and technical information however JCT will not be part of any 
court conflicts. 
Sd/-11.6.2015 
Dr. tJday S. Annapure, 
Associate Professor, 
Dept. of Food Engineering & Technology, 
Institute of Chemical Technology 
Matunga, Mumbai-400 019." 
57. The above technical opinion clearly mentioned that carbon 
G 
dioxide is used for preservation purpose only. Before the Committee
of 
Commissioners the entire process of manufacture of the product was 
explained along with all relevant orders and certificates of Food Safety 
Authorities. It was stated that the Experts in their opinions and 
certifications have mentioned that product is·commercially and technically 
distinct from products which have classified as 'aerated branded soft 
H 
drinks'. The certifications which were relied by the appellant indicate
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
69 · 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
that in the case of' Appy Fizz' the product does not undergo aeration or 
A 
carbonation; the product is thermally processed with C02 which help in 
preserving the Apple Juice concentrate which is otherwise perishable in 
nature. 
58. In the application which was filed for cladfication, which has 
been brought on the record at page 138-Annexurc P-13, in p·aragraph 
B 
3.1 elaborate process of manufacture was mentioned. 
59. Other relevant materials which were part of the clarification 
application were mentioned in clause 6 which arc to the following effect: 
"VI. OTHER RELEVANT MATERIAL 
(a) Technical opinion dated 28.02.2005 issued by the authority 
under Fruit Processing Order, 1955 i.e. Director Food & 
Vegetable Processing Industry working as licensing officer 
under Fruit Product Order 1955 in ministry of Food 
Processing Industries, Government of India. (Copy of the said 
c 
certificate is enclosed herewith as Exhibit H) 
D 
(b) Permission given for manufacture, storage and sale of 
prodzict to the factory at Varanasi issued by Central Licensing 
Authority having their office at Lucknow under letter 
dated] 9.08.2015 confirming the classification of product 
"Appy Fizz" under category 02.03.2010 i.e. Fntit Juice based 
E 
Drink and also· held that we are already holding a license. 
(Copy of the said letter is enclosed herewith as Exhibit 1) 
(c) Technical expert opinion issued by
Professor Dr. Uday S. 
Annapure dated 11.06.2015 classifying the said product as 
ready to serve Fruit beverage falling under the category of F 
02.03.2010 of FSSAI Regulation 2011 and specifical~v stated 
that "Appy Fizz" is not Carbonated Water. Exhibit J. 
(d) Technical Note and Photographs explaining tbe use of 
·impregnated Carbon Dioxide for the purpose of preservation 
as well as for the strengthening the wall of PET bottles due to 
expansion of Carbon Dioxide from inside providing the 
strength to wall of PET bottle during the transit so as to 
withstand with the handling hazards while delivering the 
product to remote area. Note and photbcopies are enclosed 
herewith as Exhibit Kand L Colly. 
G 
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SUPREME COURT REPORTS 
[2017] 5 S.C.R. 
(e) Classification of the product "Appy Fizz" has been 
recognized by a legislative body of Kera/a Government based 
on the white paper issued by empowered committed of state 
Finance Minister while introducing the White Paper on 
17.01.2005 and has issued the Original Notification SRO 82 
of 2006 dated 21.01.2006 and classified the product based 
on Central Excise Tariff which inter-alia is based on HSN at 
Entry no.71 Sr. No.4 as Fruit Juice Based Drink. Copy of the 
said Notification and White Paper is enclosed Mrewith as 
Exhibit M and Exhibit N Colly. 
(j) The said classification under Entry No. 71 sr.No.4 of the 
product under Kera/a VAT remained in Entry No. 71 at Sr.5 
despite the substitution brought by Notification SRO 119 of 
2008 dated 24.01.2008.(Copy of the said Notification is 
enclosed herewith as Exhibit 0) 
(g) The Kera/a VAT dept. had raised an issue regarding the 
classification of the product Appy Fizz in 2009. However. the 
Company had explained the reason as to why the product 
Appy Fizz has been classified as a fruit juice based drink. 
The said explanation of the company has been accepted and 
no order has been passed by the KVAT Department, accepted 
assessment order passed by assessing officer Exhibit P. 
(h) The said assessment orders have attained the.finali~v being 
not challenged by the department. 
(i) As per sub-section(lA) of Section 94 of Kera/a VAT Act, 
2003 which
inter-alia contemplates that if the dispute relates 
to tax rate of a commodity the details of first seller or the 
manufacturer of such goods in the state as the case may be 
shall be furnished by the applicant. Accordingly, we are 
submitting sales tax Assessment order under Tamilnadu VAT 
Act since the manufacturer is located in Tamilnadu, Exhibit 
Q. Hence, the said party may please be made a necessary 
party. 
(j) The issue of classification of the product "Appy Fizz" is 
decided by Hon 'ble Kera/a High Court in case of other dealer 
namely Trade Lines. However. Hon 'ble Kera/a High has 
decided that in Revision and the facts of our case are totally
MIS. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
71 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
different and therefore, as per the settled law the decision is 
A 
binding only when the facts are same and not when the facts 
are different and therefore, in our case the facts which are 
totally different were not subject matter of consideration 
before Hon 'ble High Court." 
60. The above materials which were filed by the appellant before 
B 
the Clarification Authority were relevant materials for understanding 
the manufacture process and the nature and contents of ultimate product. 
The expert authority and its opinion which were relied by the appellant 
were required to be adverted to both by the Clarification Authority as 
well as by the High Court and we are of the opinion that expert opinion 
and materials have been erroneously discarded. 
c 
61. It is further relevant to note that Revenue has not filed any 
material on the record either before the Clarification Authority or before 
the High Court in support of its view that product is covered under Section 
6( 1 )(a) that is 'aerated branded soft drink'. This Court in several cases 
has observed that onus to prove that particular goods fall in particular D 
tariff item is on the Revenue. In this context, in the judgment of this 
Court in Hindustan Ferodo Ltd. vs. Collector of Central Excise, 
Bombay, 1997(89) ELT 16(SC), in paragraph 3 it was laid down: 
"3. It is not in dispute before us.as it cannot be, that the . 
onus of
establishing that the said rings fell within Item 22F E 
lay upon the Revenue. The Revenue led no evidence. The onus 
was not discharged. Assuming therefore, that the Tribunal was 
right in rejecting the evidence that was produced on behalf 
of the appellants, the appeal should, nonetheless, have been 
allowed." 
62. We, thus, conclude that orders of Food Safety Authority and 
expert opinion regarding process of manufacture relied by the appellant 
were relevant materials and Clarification Authority and High Co mt erred 
in law in discarding these materials. 
Issue No.9 : CONCLUSION 
63. While referring to Section 6(l)(a) and Section 6(l)(d) we 
have already noticed that the power of the State Government to issue 
notification under Section 6(1 )( d) arises "in the case of goods not falling 
under clause (a) or (c)". After enactment of Act, 2003 Section 6(l)(a) 
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[2017] 5 S.C.R. 
A 
from the very beginning included 'aerated branded soft drink'. The 
inclusion offruitjuice based drinks inEntry 71 clearly proved that fruit 
juice based drinks were never treated to be included in 'aerated branded 
soft drinks'. Had fruit juice based drinks were also included in 'aerated 
branded soft drinks', the State could not have exercised its power under 
B 
c 
Section 6( 1 )( d) to include sttch products in Entry 71. Whether after 
amendment of Entry 71 by S.R.O. No.119 of 2008 something which 
was earlier included in Entry 71 shall now stand transferred to Section 
6(l)(a) is the question to be answered. Even though Entry 71 has been 
amended but there is no amendment in Entry 2 of Section 6(l)(a), so as 
to include something not included in Section 6(l)(a). By S.R.O. No.119 
of2008, residuary entry by Item No.5 is added which is "similar other 
products not specifically mentioned under any other entry in this list" 
which is potent enough to include fruit juice based drinks and it is clear 
that fruit juice based drinks are subsumed in Item No.5 of Entry 71 after 
its amendment. We have already observed that items which h<'.ve been 
D 
grouped under Section 6(l)(a) ar'!all those items where higher tax slab 
has been fixed looking into the nature of the goods. It is well setded that 
all tobacco based goods :which are now included in Item No.6(l)(a) are 
dangerous to health, the use of the plastic, polythene etc. which
have 
also adverse effect on the health and environment. In contrast to 'aerated 
E 
F 
branded soft drinks' which are included in Section 6(1 )(a), health drinks 
of all varieties are included in Entry 71 as amended. Aerated branded 
soft drinks which are referred to in Section 6(l)(a) cannot be drinks 
which are health drinks. Fruit juice based drinks can be reg<:rded as 
health drinks as compared to other aerated branded soft drinks like pepsi 
cola, coka cola, etc. We are, thus, of the opinion that the appellant has 
successfully proved by relevant scientific and technical materials that 
the product in question that is 'Appy Fizz' is a commodity which is fully 
covered by Item No.5 of Entry 71 as amended by S.R.O. No.119 of 
2008. The High Court discarded scientific and expert opinion with regard 
to manufacturing process and contents of the product. The orders of 
Food Safety Authority were also discarded which were relevant for 
G 
considering the nature and contents of product. The adjudication by 
CESTAT was relevant at least on the aspect that the 'Appy Fizz' is not 
aerated which was also discarded by the High Court as well as by the 
Committee of the Commissioners. In view of the aforesaid discussion, · 
we are of the considered opinion that the appellant has successfully 
H
M/S. PARLE AGRO (P) LTD. v. COMMISSIONER OF 
73 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
proved from the materials brought on the record that the product 'Appy 
A 
Fizz' was required to be classified under Item No.5 of the Entry 71 as 
amended with tax liability at 12.5% after amendment by S.R.O. No: 119 
of2008 (now at the rate of 14.5%). 
64. Now, coming to the appeal arising out ofSLP(C)No.9467 of 
2016. The appeal has been filed by the Revenue challenging the judgment 
of learned Single Judge and Division Bench by which direction was 
issued to the Committee of the Commissioners to decide the application 
filed by the appellant under Section 94 of Act, 2003. Learned Single 
Judge has issued directions dated 31 '' August, 2015 directing the 
Commissioner of Commercial Taxes to pass orders on the clarification 
application. The appellant was also given liberty to produce all material, 
on which the appellants intend to place reliance to substantiate their 
contention with regard to the classification of the product in question. In 
writ petition filed by the Revenue before the Division Bench, the Division 
Bench affirmed the order and while referring to sub-section ( 4) of Section 
94 stated following: 
"Sub-section(4) of Section 94 states that where any question 
arises from any order already passed or any proceedings 
recorded under the KVAT Act, or any earlier law, no such 
question shall be entertained for determination under Sub-
section (1). Insofar as the issue raised
by the respondent 
through the application before the authority is 9011cerned, 
there is no order that has already been passed or there is no 
proceedings recorded as against it which could be treated as 
a final one. All what has been done is the issuance of notice 
as noted above as a proposal in relation to the assessment 
proceedings. The so-called revisional order passed by this 
Court' in yet another case would not also have the efficaly of 
depleting the jurisdiction of the authori~v under Section 94 
of the KVAT Act to issue clarification. The very purpose of 
the provision in the form of Section 94 and clothing authori(v 
with power to make different nature of considerations tu 
conclude such issues, necessarily, show that no revisional 
order of this Court in an earlier proceedings could conclude 
the issues which could be considered in an application fur 
clarification by the competent authority under Section 94 of 
the KVAT Act." 
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SUPREME COURT REPORTS 
(2017] 5 S.C.R. 
65. The Division Bench did not commit any error in dismissing 
_ the appeal and observing that no revisional order of this Court in an 
'-earlier proceedings could conclude the issues which could be considered 
in an application for clarification by the competent authority under Section 
94 of Act, 2003. We do not find any error in the judgment of the learned 
Single Judge as well as of Division Bench and this appeal deserves to be 
dismissed. 
66. Now coming to Civil Appeals arising out ofSLP(C)Nos.24460-
61 of 2016. These appeals have been filed by the assessee against an 
order oflearned Single Judge by which order the learned Single Judge 
C 
disposed of the writ petition by following orders: 
"Accordingly, these writ petitions are disposed of in the 
following manner: 
(i) The demand made in the above cases shall remain 
stayed till disposal. of the appeals, on condition of the 
D 
petitioners depositing 50% of the amount involved. 
E 
F 
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(ii) The petitioners are granted four weeks time to remit 
the amount. 
(iii) The Appellate Authority shall endeavour to dispose 
of the appeal as expeditious~v as possible. " 
67. Tlw learned Single Judge has noted about the pendency of 
SLP(C)N os.14697-98/2016 in this Court where classification of the 
product was under challenge. By this judgment we are also disposing of 
the Civil Appeals arising out ofSLP(C)Nos.14697-14698 of2016. Further 
proceedings in case of the assessee
that is Mis. We Six Traders Etc.Etc. 
has to be, thus, concluded in accordance with our decision in Civil Appeals 
arising out of SLP(C)Nos.14697-14698 of2016. Any amount deposited 
in pursuance of the interim orderofthe High Court dated 141h July, 2016 
shall abide· by.the consequential orders to be passed in the proceedings 
·against the assessee. We, thus, do not find it necessary to interfere with 
the order dated l 41h July, 2016 of the learned Single Judge and the Civil 
Appeals are disposed of with direction that in procetidings against the 
assessee consequential orders shall be passed including an adjustment 
of the amount deposited, if necessary, as per our judgment in. Civil Appeals 
arising out SLP(C)Nos.14697-14698 of2016.
M/S. PARLE AGRO (P) LTD. v. COMMISSIONER OF . 
75 
COMMERCIAL TAXES [ASHOK BHUSHAN, J.] 
In the result 
A 
( 1) Civil Appeals-arising out of SLP( C)Nos.14697-14698 of2016 
are allowed, judgment of the Division Bench as well as order passed in 
the Review Application are set aside. OT Appeal filed by the appellant 
is allowed and the order passed by the Committee of Joint Commissioners 
dated 06.11.2015 is set aside. It is declared that product of the appellant 
B 
'Appy Fizz' is required to be classified as under Item No.5 of Entry 71 
as amended by S.R.O. No.119 of2008. 
(2) Civil Appeal arising out of SLP(C)No. 9467 of 2016 is 
dismissed. 
(3) Civil Appeals arising out of SLP(C)Nos.24460-61 of2016 are 
C 
disposed of directing the proceedings against the assessee be decided in 
the light of our judgment in Civil Appeals arising out of SLP(C)Nos.14697-
14698 of 2016 and necessary consequential orders be passed accordingly. 
Kalpana K. Tripathy 
Appeals disposed of. 
. '