Common parlance test governs classification: milk powder with added fat was not skimmed milk powder and faced higher tax.

For classification under a fiscal entry, the common parlance test prevails and the dealer's label cannot override the actual composition of the goods. Milk powder sold as skimmed milk powder but containing added sugar and fat was held not to answer the ordinary trade understanding of skimmed milk powder, which denotes low fat content. On the material before the HC, a product containing 10 per cent fat could not be treated as skimmed milk powder. It was therefore not entitled to the lower tax rate and was correctly subjected to the higher rate of tax under the Assam Value Added Tax Act, 2003.

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Issues: Whether milk powder sold as "skimmed milk powder" but containing added sugar and fat is classifiable as skimmed milk powder for the lower rate of tax under the Assam Value Added Tax Act, 2003.

Analysis: In interpreting a fiscal entry, the common parlance meaning governs. A dealer's label is not decisive if the contents of the product belie that description. The Commissioner found that skimmed milk powder, in common understanding, denotes milk powder with low fat content, and relied on the product composition, including the admitted fat content, as well as accepted standards to conclude that the goods were not skimmed milk powder. The Court accepted that common parlance applies, but held that a product containing 10 per cent fat could not, on the material before it, be treated as skimmed milk powder in ordinary trade understanding.

Conclusion: The product was not entitled to classification as skimmed milk powder and was correctly subjected to the higher rate of tax.

Ratio Decidendi: For classification under a fiscal entry, the common parlance test prevails, but a dealer's label cannot override the actual composition of the goods where the contents are inconsistent with that description.

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