Tax classification of branded potato chips turns on plain meaning, common parlance, and residuary entry treatment.

Branded potato chips are analysed under the Tamil Nadu Value Added Tax Act, 2006 by applying the plain meaning of the competing schedule entries, the common parlance test and strict construction of taxing provisions. Entry 51 covers savouries like chips only when sold without a brand name, while Entry 107 on processed fruit and vegetables does not extend to branded potato chips made by frying, seasoning and packing potato slices. Because branded chips do not fit the specific entries, they fall within the residuary Part C. The text also notes that the Commissioner's clarification was treated as an administrative classification decision, with no requirement of prior hearing and no illegality found.

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Issues: Whether branded potato chips are classifiable under Entry 107 of Part B of the First Schedule to the Tamil Nadu Value Added Tax Act, 2006 as processed fruit and vegetables, or under Entry 51 of Part B as unbranded savouries like chips, or alternatively under Part C as residuary goods; and whether the clarification treating branded chips as taxable under Part C was invalid.

Analysis: Section 3(2) of the Tamil Nadu Value Added Tax Act, 2006 levies tax at the rate specified in the relevant schedule entry, and the Court construed the competing entries on their plain language. Entry 51 of Part B specifically covers foods and food preparations, including savouries like chips, only when sold without a brand name. Entry 107 of Part B covers processed fruit and vegetables and enumerated allied products such as fruit jam, jelly, pickle, fruit squash, paste, fruit drink and fruit juice, but it does not extend to branded potato chips. Applying the common parlance test and the strict rule of construction applicable to taxing statutes, the Court held that frying, seasoning and packing potato slices as branded chips does not make them processed vegetables within Entry 107. Since branded chips do not fit in the specific entries of Parts A or B, they fall within the residuary Part C. The Court also held that the clarification issued by the Commissioner was an administrative classification decision, not a quasi-judicial order requiring prior hearing, and found no arbitrariness or illegality in the classification.

Conclusion: Branded potato chips are not classifiable as processed vegetables under Entry 107 and are correctly taxable under Part C of the First Schedule. The clarification was upheld.

Ratio Decidendi: In a taxing statute, goods must be classified on the clear wording of the relevant entry, and where branded goods do not fall within any specific entry, they are taxable under the residuary entry; common parlance and strict construction control the classification exercise.

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