Essential character test governs classification of diluted dye product under the specific HSN-linked VAT entry, not the residuary schedule.

Ujala Supreme, a diluted mixture of Acid Violet Paste and water, was classified by reference to its essential character as a dye material. Where an HSN-linked entry exists under the Assam Value Added Tax Act, 2005, the tariff description must be applied, and Rule 3(b) of the General Rules for Interpretation of the Harmonized System governs mixtures and composite goods by directing classification according to the component giving the goods their essential character. The residuary Fifth Schedule can be used only when no specific entry reasonably covers the product. On that basis, the product was classifiable under Entry 114 of Schedule II-C with HSN 3204 12 94, and not under the higher-rate residuary schedule.

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Issues: Whether Ujala Supreme, a highly diluted form of Acid Violet Paste, was classifiable under Entry 114 of Schedule II-C of the Assam Value Added Tax Act, 2005 with the corresponding HSN code 3204 12 94, or whether it fell under the residuary Fifth Schedule and was taxable at the higher rate.

Analysis: The product was shown by the material on record to consist substantially of Acid Violet Paste and water, and the Court treated its essential character as that of the dye material from which it was derived. The classification scheme under the Act, read with the Harmonized System of Nomenclature, required adoption of the tariff description where an HSN-linked entry existed. The Court held that Rule 3(b) of the General Rules for Interpretation of the Harmonized System applied to mixtures and composite goods, so that classification must follow the material or component giving the goods their essential character. The residuary entry could be used only where no other entry reasonably covered the product. On that basis, the Court rejected the approach that treated the diluted product as commercially distinct merely because of its retail form or dilution.

Conclusion: Ujala Supreme was held to be classifiable under Entry 114 of Schedule II-C of the Act with HSN 3204 12 94 and not under the residuary Fifth Schedule.

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