Reduced sales tax rate for branded butter and ghee continues where a valid notification remained operative despite later entry substitution.

Butter and ghee sold under a brand name remained eligible for the reduced sales tax rate of 10% for the relevant period where a valid rate-reducing notification was in force, even after substitution of the taxing entry in the Tamil Nadu General Sales Tax Act. The substitution of Entry 8 in Part D did not by itself withdraw the earlier notification benefit, and the later erratum supported the continued applicability of the reduced rate until the amendment took effect. The Tribunal was noted to have failed to apply the entry and notification as they stood for the assessment year concerned, and the higher demand at 11% was treated as unsustainable.

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Issues: Whether butter and ghee sold under a brand name registered under the Trade and Merchandise Marks Act, 1958 continued to attract the reduced tax rate of 10% for the assessment year 1998-99 notwithstanding the substitution of Entry 8 in Part D of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.

Analysis: Entry 8 of Part D of the First Schedule initially covered butter and ghee sold under a brand name and the rate of tax was reduced to 10% by Notification No. II(1)/CTRE/22(a-2)/97 dated 05.03.1997 issued under Section 17(1) of the Tamil Nadu General Sales Tax Act, 1959. Though the entry was substituted with effect from 04.05.1998 to refer to butter and ghee sold under a brand name registered under the Trade and Merchandise Marks Act, 1958, the substituted entry itself did not displace the benefit of the earlier notification. The later erratum also showed that the 10% reduction remained applicable until the change took effect, and the Tribunal had failed to give effect to the entry and notification as they stood for the relevant period.

Conclusion: The assessee was entitled to tax at 10% on the disputed turnover, and the demand at 11% was unsustainable.

Ratio Decidendi: Where a taxing entry and a valid rate-reducing notification operate for the relevant period, a subsequent substitution of the entry does not defeat the reduced rate unless the later amendment clearly withdraws or excludes that benefit.

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