Hamdard (Wakf) Laboratories Vs Commissioner (Supreme Court of India)
King Stubb & Kasiva (KSK) has successfully represented Hamdard (Wakf) Laboratories before the Supreme Court of India in a landmark VAT classification dispute concerning its flagship product, Sharbat Rooh Afza, under the Uttar Pradesh Value Added Tax Act, 2008.
In a reportable judgment (2026 INSC 195), a Bench comprising Justices B.V. Nagarathna and R. Mahadevan set aside the ruling of the Allahabad High Court and held that Rooh Afza is classifiable as a “fruit drink” under Entry 103 of Schedule II (Part A). The Court ruled that the product attracts VAT at the concessional rate of 4%, and not 12.5% under the residuary entry, for the relevant period of 2008-2012.
The Supreme Court clarified that regulatory or licensing classifications under food laws cannot control the interpretation of fiscal entries unless expressly incorporated in the taxing statute. It further held that the burden to justify classification under a residuary entry lies on the Revenue, and such burden was not discharged in the present case. The Court emphasised that where a product can reasonably fall within a specific entry, resort to the residuary entry is impermissible. The judgment also reaffirmed the principle that classification in tax statutes must be based on common parlance and commercial understanding, supported by evidence relating to the product’s composition, character, and market perception. The Court found that the authorities had placed undue reliance on regulatory descriptions instead of examining commercial understanding and other relevant material.
Senior Advocate Arvind Datar appeared for Hamdard, instructed by the KSK team comprising Aditya Bhattacharya (Partner), Vipin Upadhyay (Partner), Simran Tandon (Associate Partner), Ritwik Tyagi (Associate), and Akriti Sharma (Associate).
This ruling is expected to have significant implications for the classification of traditional beverage concentrates and fruit-based drinks under indirect tax regimes. It also provides authoritative guidance on the limited scope of residuary entries and reinforces the evidentiary burden on tax authorities in classification disputes.
About King Stubb & Kasiva (KSK)
King Stubb & Kasiva is a full-service Indian law firm with a pan-India presence and a team of over 200 legal professionals. The firm advises multinational corporations, financial institutions, government bodies, and emerging businesses across key practice areas including corporate and M&A, dispute resolution, taxation, intellectual property, regulatory, media and entertainment, employment, and technology laws.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
