In Brief
The Supreme Court addressed whether Sharbat Rooh Afza, a non-alcoholic beverage with 10% fruit juice content, qualifies as a "fruit drink" for Value Added Tax purposes in Uttar Pradesh. The tax authorities classified it under a higher residuary entry (12.5% VAT) instead of the concessional "fruit drink" category (4% VAT). Applying the "common parlance test" and "essential character test," the Court held that the product's distinctive beverage identity derives from its fruit content, despite sugar comprising 80% by volume. Entry 103's inclusive language does not impose a minimum percentage threshold. The Court rejected reliance on regulatory food classifications as determinative for tax purposes, emphasizing the Revenue failed to discharge its burden. The Court allowed the appeals, holding Rooh Afza classifiable as a fruit drink under the concessional rate, with directions for refund of excess tax paid.
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