UPVAT| "Vitamins And Minerals Pre-Mix" Are Unclassified Goods, Do Not Fall Under "Ores And Minerals", "Drugs And Medicines" Or "Chemicals": Allahabad High Court
Upasna Agrawal
3 Sept 2024 11:00 AM IST
The Allahabad High Court has upheld the finding of the Commercial Tax Tribunal holding that "vitamins and minerals pre-mix" are unclassified goods, do not fall under "ores and minerals", "drugs and medicines" or "chemicals” under Schedule II of the U.P. Value Added Tax Act, 2008. Challenging the order of the Commercial Tax Tribunal, counsel for revisionist-assesee argued that...
The Allahabad High Court has upheld the finding of the Commercial Tax Tribunal holding that "vitamins and minerals pre-mix" are unclassified goods, do not fall under "ores and minerals", "drugs and medicines" or "chemicals” under Schedule II of the U.P. Value Added Tax Act, 2008.
Challenging the order of the Commercial Tax Tribunal, counsel for revisionist-assesee argued that the department had been treated "vitamins and minerals pre-mix" as “chemicals” and were consequently taxing it at 4% under Entry 29 of Schedule II of the Act. Since dispute arose regarding classification of "vitamins and minerals pre-mix", revisionist approached the Commercial Tax Tribunal under Section 59 of the Act seeking its opinion on the classification.
The Commissioner, Commercial Tax held that “"vitamins and minerals pre-mix" does not fall under the Entry 89 under the heading "ores and minerals" inasmuch as "ores and minerals" pertain to "raw material" and "vitamins and minerals pre- mix" could not fall under the category of Entry 89 and accordingly rejected the application of the revisionist and held that "vitamins and minerals pre-mix" would be categorized as "unclassified goods" liable to be taxed @ 12.5%.”
The Revisionist-assesee approached the High Court claiming that "vitamins and minerals pre-mix" produced by the revisionist are mineral preparations which include chemicals like Calcium Carbonate, Di-calcium Phosphate, Potassium, Iodine, Sodium Banzol etc and liable to be taxed under “chemicals”.
Rejecting the arguments of the revisionist-assesee, Justice Alok Mathur held that the tax levied is not on the raw materials (chemicals) used in making the pre-mix but is levied on the final product which is the “vitamins and minerals pre-mix".
“Section 4 of the Act, 2008 which a charging section clearly states that the "tax payable on sale of goods under this Act, shall be levied and paid....." accordingly tax is levied on the goods and not individually on the raw material from which the goods are prepared. Undisputedly, items given in Entry 29 are not the goods which are being sought to be taxed in the present case, but it is the finished product which is "vitamins and minerals pre-mix"”, held the Court.
Regarding "vitamins and minerals pre-mix" falling under the category "drugs and medicines" under Entry 41 of Schedule II of the Act, the Court observed that in common parlance “drugs” and “medicines” are synonymously used. It was observed that Entry 41 defines products which are alleviate any disease or its symptoms. The Court held that no material had been produced before the Court to show that "vitamins and minerals pre-mix" fall under the category "drugs and medicines".
Further, the Court observed that Entry 89 which defines "ores and minerals" only mentions raw ores and minerals and not pre-mix. Therefore, it has been held that "vitamins and minerals pre-mix" do not fall under Entry 89.
Accordingly, the Court dismissed the revision upholding the decision of the Commercial Tax Tribunal that "vitamins and minerals pre-mix" is an unclassified item under the UPVAT Act.
Case Title: M/S Sarswat Peroxides Private Ltd. Throu Its Director v. The Commissioner Commercial Taxes U.P.Gomti Nagar Lko. [SALES/TRADE TAX REVISION No. - 196 of 2013]
