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Hamdard (Wakf) Laboratories v. Commissioner, Commercial Tax, U.P. Commercial 2026 INSC 195 - UPVAT Act - Sharbat Rooh Afza - Fruit Drink

"Sharbat Rooh Afza” is classifiable as a fruit drink / processed fruit product under UPVAT Act

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• 4 min read

Uttar Pradesh Value Added Tax Act, 2008 - "Sharbat Rooh Afza” is classifiable under Entry 103 of Schedule II, Part A of the UPVAT Act as a fruit drink / processed fruit product and is exigible to VAT at the concessional rate of 4% during the relevant assessment years.  (Para 40)

Interpretation of Statutes - Fiscal Statute - Fiscal statute must be interpreted in its own language. Regulatory enactments such as the FPO or standards framed by the Food Safety and Standards Authority of India operate in a distinct domain namely quality control, safety, and licensing. They are neither determinative nor conclusive for purposes of fiscal classification unless a taxing statute expressly incorporates or adopts such definitions. (Para 16)

Common parlance test - In the absence of a statutory definition, the settled principle of interpretation mandates application of the common parlance test, namely, how the product is understood in commercial and popular sense by those who deal with it.  Classification must be determined on the basis of how the product is understood in common or commercial parlance, having regard to tangible material such as its composition, product literature, label, character, and user, and not merely on technical or regulatory description - Where a commodity reasonably fits within a specific entry, it ought not to be consigned to a residuary entry - Where the Revenue seeks to classify a product under a residuary or entry different from that claimed by the assessee, the burden lies squarely upon it. Classification relates directly to chargeability; therefore, the onus of establishing applicability of a taxing entry rests upon the Department. (Para 19-21) Classification based on common parlance test cannot rest on mere conjecture or assumption. This must be founded upon cogent and objective material demonstrating how the goods are understood in trade and in the commercial world. This principle assumes greater significance where the Revenue seeks to classify a product under the residuary entry - Recourse to a residuary clause is permissible only when the goods cannot reasonably be brought within the ambit of any specific entry. Such inability must be established by the Revenue on the basis of relevant material; the residuary entry cannot be invoked merely because the specific entry is construed narrowly or because some ambiguity is perceived. (Para 21.4)

Test of essential character - The test of essential character requires the identification of that component which imparts to the finished product its distinctive identity and functional utility. Quantitative predominance of a particular ingredient is not decisive if such ingredient merely performs a facilitating role in formulation, preservation or dilution. (Para 24)

Case Info

Case name and neutral citation:M/S Hamdard (Wakf) Laboratories v. Commissioner, Commercial Tax, U.P. CommercialNeutral citation: 2026 INSC 195


Coram:Hon’ble Ms. Justice B.V. NagarathnaHon’ble Mr. Justice R. Mahadevan (author of the judgment)


Judgment date:25 February 2026 (New Delhi)


Case laws and citations referred:

  1. Hamdard Dawakhana (Wakf), Delhi and another v. Union of India, AIR 1965 SC 1167
  2. Mauri Yeast India Private Limited v. State of Uttar Pradesh and another, (2008) 5 SCC 680
  3. Commissioner of Customs (Import), Mumbai v. Dilip Kumar and Company and others, (2018) 9 SCC 1 (as cited in text: 9 SCC 17)
  4. CST v. Jaswant Singh Charan Singh, 1967 SCC OnLine SC 154
  5. Indo International Industries v. CST, (1981) 2 SCC 528
  6. Deputy Commissioner v. G.S. Pai, (1980) 1 SCC 142
  7. Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, (1961) 12 STC 286
  8. Indo International Industries v. Commissioner of Sales Tax, (1981) 7 STC 359 (same case; STC reporter citation)
  9. A. Nagaraju Bros v. State of Andhra Pradesh, 1994 Supp (3) SCC 122
  10. CCE v. Connaught Plaza Restaurant (P) Ltd, (2012) 13 SCC 639
  11. CCE v. Wockhardt Life Sciences Ltd, (2012) 5 SCC 585
  12. Delhi Cloth and General Mills Co. Ltd. v. State of Rajasthan, (1980) 4 SCC 71 : 1980 SCC (Tax) 348
  13. Indian Aluminium Cables Ltd. v. Union of India, (1985) 3 SCC 284 : 1985 SCC (Tax) 383
  14. CCE v. Carrier Aircon Ltd., (2006) 5 SCC 596
  15. Hindustan Ferodo Ltd v. Collector of Central Excise, (1997) 2 SCC 677
  16. HPL Chemicals Ltd v. Commissioner of Central Excise, (2006) 5 SCC 208
  17. Quinn India Ltd v. Commissioner of Central Excise, (2006) 9 SCC 559
  18. CCE v. Sharma Chemical Works, (2003) 5 SCC 60
  19. CCE v. Vicco Laboratories, (2005) 4 SCC 17
  20. Kemrock Industries and Exports Ltd. v. Commissioner of Central Excise, 2007 (210) E.L.T. 497 (SC)
  21. Reserve Bank of India v. Peerless General Finance & Investment Co. Ltd., (1987) 1 SCC 424
  22. Dilworth v. Stamps Commissioners, [1899] AC 99 (PC)
  23. Dunlop India Ltd v. Union of India, (1976) 2 SCC 241
  24. Alladi Venkateswarlu v. State of Andhra Pradesh, (1978) 2 SCC 552

Statutes / laws and instruments referred:

  • Uttar Pradesh Value Added Tax Act, 2008 (UPVAT Act)
    • Schedule II, Part A, Entry 103 (processed or preserved vegetables and fruits, including fruit drink and fruit juice)
    • Schedule V, Residuary Entry 1 (all goods not in Schedules I–IV, taxed at 12.5%)
  • Uttar Pradesh Trade Tax Act, 1948 and related notifications (pre‑VAT regime)
  • Uttar Pradesh Goods and Services Tax Act, 2017 (context of post‑VAT regime)
  • Central Excise Tariff Act, 1985
    • Supplementary/Chapter Note 3 to Chapter 21 defining “sharbat”
    • Tariff Heading 2202 (fruit pulp or fruit juice based drinks under GST context)
  • Fruit Products Order, 1955 (FPO), especially:
    • Rule / Clause 2(j) defining fruit products/sharbat
    • Clause 11(1) & 11(2) on “fruit syrup” vs “non‑fruit syrup” and 25% fruit juice requirement and labelling as “Non‑Fruit”
  • Food Safety and Standards framework (including a 31.07.2009 FSSAI clarification)
  • Prevention of Food Adulteration Act, 1954 (regulatory background)
  • Constitution of India, Seventh Schedule, List II, Entry 54 (States’ power to levy VAT/sales tax)

Three‑sentence brief summary:The Supreme Court held that Hamdard’s “Sharbat Rooh Afza,” though containing only about 10% fruit juice and a large proportion of sugar syrup, derives its essential character from its fruit content and allied distillates and is therefore classifiable as a “fruit drink”/processed fruit product under Entry 103 of Schedule II, Part A of the UPVAT Act. Rejecting reliance on food‑law labelling (as “non‑fruit syrup”) and the Revenue’s bare assertion, the Court applied the common‑parlance and essential‑character tests, stressed that residuary entries can be used only when specific entries clearly do not apply, and found that the Revenue had failed to discharge its burden to justify residuary classification. Consequently, it set aside the Allahabad High Court’s view, held Rooh Afza taxable at 4% (not 12.5%) for 01.01.2008–31.03.2012, and directed refund/adjustment of excess tax paid.

Hamdard (Wakf) Laboratories v. Commissioner, Commercial Tax, U.P. Commercial 2026 INSC 195 - UPVAT Act - Sharbat Rooh Afza - Fruit Drink
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