Bread-rusk classification under VAT follows the specific bread entry, not the residuary taxable category.

Bread-rusk was classified under the specific entry for bread rather than the residuary taxable entry under the Himachal Pradesh VAT regime. The Court applied the principle that a residuary entry is a last resort and that a specific description prevails where the product answers it. Using the common parlance and essential-character approach, it noted that bread and rusk share the same raw material and manufacturing process, with the difference confined to baking and moisture content. The revenue failed to discharge the burden of showing that bread-rusk could not fall within the bread entry, so VAT on the residuary basis was unsustainable.

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Issues: Whether bread-rusk is classifiable as "bread" under Entry 9 of Schedule B of the Himachal Pradesh Value Added Tax Act, 2005 and entitled to exemption, or whether it falls under the residuary entry in Part III of Schedule A and attracts VAT.

Analysis: The governing principle in classification is that recourse to a residuary entry is permissible only as a last resort, and if a product answers the description of a specific entry, that entry must prevail. The Court applied the common parlance and essential-character approach, noting that bread and rusk share the same raw material and manufacturing process, with the difference lying only in the extent of baking and moisture content. It also held that the burden lay on the revenue to establish that the product could not be brought within the bread entry, and that such burden was not discharged by convincing evidence.

Conclusion: Bread-rusk was held to fall within the entry for bread and not within the residuary taxable entry, so the levy of VAT on that basis was unsustainable.

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