Rectified Spirit and ENA exemption under VAT schedule ends after amendment; residuary taxation applies where not sold for human consumption.

After the 01.04.2013 amendment to the VAT schedule, rectified spirit and ENA were treated as distinct commodities from liquor sold for human consumption under the relevant excise licences, so the earlier liquor exemption no longer covered them. The Court accepted the later view that liquor is a genus and spirit a species, but rectified spirit remains separately regulated under the excise and distillery framework and does not automatically fall within the amended exemption entries. As a result, ENA and rectified spirit not sold as liquor for human consumption fall in the residuary category and may be subjected to entry tax or VAT.

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Issues: Whether rectified spirit or ENA, after the 01.04.2013 amendment to the VAT schedule, continued to fall within the exempted category of liquor under the Madhya Pradesh Value Added Tax Act, 2002 so as to remain outside levy of entry tax or VAT.

Analysis: The exemption earlier available to liquor under Entry 47 of Schedule I was altered from 01.04.2013, and the statutory scheme thereafter treated liquor sold by specified licence holders differently from other forms of alcohol. The definitions in the M.P. Excise Act, 1915 show that liquor is a genus and spirit is one of its species, but rectified spirit is a distinct commodity under the excise and distillery rules, requiring separate treatment. The Court followed the later view that ENA and rectified spirit, when not sold as liquor for human consumption under the relevant licences, fall within the residuary category and not within the amended exemption entries. The common parlance approach adopted by the appellate authority was therefore not shown to be erroneous.

Conclusion: Rectified spirit was held not to be exempt under Entry 47 of Schedule I or Entry 6 of Part III-A of Schedule II after 01.04.2013, and the levy was sustained in favour of the Revenue.

Ratio Decidendi: After the amendment effective from 01.04.2013, rectified spirit or ENA, being a distinct commodity from liquor sold for human consumption under the specified excise licences, does not continue to enjoy the liquor exemption and may be taxed under the residuary entry.

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