Supreme Court: GRD powder taxed under residuary entry, not as a "beverage", on strict reading of tax statute

The Supreme Court dismissed two appeals by the Madhya Pradesh commercial tax department seeking to tax "GRD Powder" and "GRD Mix" as "Non-Alcoholic Drinks and Beverages" under Entry 20(ii) of Schedule II to the M.P. Commercial Tax Act, 1994, which attracts a 10% rate, rather than under the residuary entry's 8% rate. Affirming the Madhya Pradesh High Court's 2011 judgment, the Court, in Civil Appeal Nos. 9788-9789 of 2013, held that a taxing statute must be construed strictly on its plain language, citing Mathuram Agrawal v. State of Madhya Pradesh, and that the taxable event is fixed by the form in which the goods are sold, not by their end use after sale, following CCE Delhi v. Carrier Aircon and Dunlop India v. Union of India.

Entry 20(ii) lists syrups, cordials, distilled juices, arks and essences, all liquids; applying the rule of ejusdem generis, the Court held the word "beverages" in that entry takes its colour from these liquid items and cannot be stretched, through a "common parlance" or functional test, to cover goods sold as a powder or mix. Since GRD Powder and GRD Mix are sold as solids and not as liquids, the Court held they fall outside Entry 20(ii) and are correctly taxed under the residuary entry, distinguishing the appellants' reliance on Pioma Industries v. State of Kerala and S. Samuel M.D. v. Union of India as inapplicable on facts.