Mango pulp based slice is merely a drink and not a 'food article'; liable to Delhi Sales Tax at 8%

Mango pulp based drink 'Slice' is merely a drink/thirst quencher and not a 'food article' as per common parlance test; hence, it is liable to Delhi sales-tax only at 8 per cent

Facts:

a) The Assessee, a trader in fruit/mango pulp based drink, known as "Slice", paid sales-tax thereon at 8 per cent;

b)  The Department argued that said mango pulp 'Slice' was 'preserved food article' under Entry 47 of First Schedule and taxable at 12 per cent;

c) The Tribunal relied on definition of 'food article' under Prevention of Food Adulteration Act and held that said product was a 'food article'.

On appeal, the High court held as under:

1) There is no specific entry which deals with beverages or fruit based drinks or juices. Therefore, applicable test which had to be adopted to judge whether an entry in a taxing statute comprehends one or other article, was common parlance test;

2) Consequently, Tribunal's approach in seeking recourse to definition under Prevention of Food Adulteration Act, was misplaced as there was no reference under Delhi Sales Tax Act imposing such definition;

3) Predominant content of mango pulp drink is water (70 per cent) and mango pulp content is merely 17 per cent. Since product does not claim to be a fruit juice, revenue cannot urge that it has even a minimum modicum of nutritive properties to be considered as 'food';

4) Accordingly, mango pulp based drink is, at best, an instant energy giver and a thirst quencher and not a "food article" by an application of common parlance test. Hence, it was liable to sales-tax only at only 8 per cent. -  Varun Beverages Ltd. v. Commissioner of Value Added Tax [2013] 40 taxmann.com 59 (Delhi)