Broad sales tax classification of pouch soft drinks and fruit preparations upheld under entries for bottled drinks and branded foods.

Soft drinks sold in pouches were treated as "bottled soft drinks" under entry 91 because the term was construed broadly to cover soft drinks kept in a container functionally equivalent to a bottle, and the levy at 8 per cent was sustained. The supply of squash and fruit jam was also treated as a taxable sale because the transaction involved manufacture and supply of finished goods with separate billing for materials and labour; it was classified under the entry covering foods, including fruit preparations sold under a brand name, and the turnover was upheld as taxable under entry 103. The assessment and classification made by the tax authorities were sustained in full.

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Issues: (i) Whether soft drinks sold in pouches under a brand name were classifiable as bottled soft drinks under entry 91 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. (ii) Whether the supply of squash and fruit jam was a taxable sale and, if so, whether it fell under entry 103 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.

Issue (i): Whether soft drinks sold in pouches under a brand name were classifiable as bottled soft drinks under entry 91 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The expression "bottled soft drinks" was construed broadly to cover soft drinks confined in a container in the nature of a bottle. On that construction, soft drinks sold in pouches were treated as bottled soft drinks for the purpose of entry 91.

Conclusion: The classification of soft drinks sold in pouches under entry 91 was upheld and the levy at 8 per cent was sustained.

Issue (ii): Whether the supply of squash and fruit jam was a taxable sale and, if so, whether it fell under entry 103 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The transaction was found to involve manufacture and supply of fruit jams and squashes, with separate billing for materials and labour. On that footing, it was treated as a sale transaction and classified under the entry relating to foods including preparations of fruits sold under a brand name.

Conclusion: The assessment of the turnover relating to squash and fruit jam as taxable sales under entry 103 was upheld.

Final Conclusion: The revision failed in entirety, and the assessment and classification made by the tax authorities were sustained.

Ratio Decidendi: For sales tax classification, a container need not be a literal bottle if the goods are sold in a form functionally equivalent to bottled soft drinks, and a transaction involving manufacture with separate billing for materials and labour may still constitute a taxable sale of the finished goods.

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