Orissa High Court: Kinley Water Falls Within Water, Not Aerated Or Mineral Water, Comes Within Tax Free List

The Orissa High Court in the case State of Odisha Versus M/s. Hindustan Coca-Cola observed and has held that the sale of packaged drinking water which is under the brand name Kinley Water falls within the expression “water but not aerated or mineral water which is being sold in bottles or in the sealed containers, and is being covered under Entry No.39 of the Tax-Free List.
The division bench comprising of Chief Justice S. Murlidhar and Justice Murhari Sri Raman in the case observed that the packaged drinking water which is being sold under the brand name “Kinley Water” is nothing but purified water.
It has been claimed by the respondent, Hindustan Coca-Cola Beverages Pvt. Ltd, the exception which being in respect of the sale of “packaged drinking water,” which was sold under the brand name “Kinley Water,, wherein treating the same as embraced within the meaning of entries in Serial No. 39 of the Schedule of Goods declared and the same is exempted from the levy of sales tax.
The Assessment Authority rejected the claim of exception in an assessment year 2004-2005 under Section 12(4) of the Odisha Sales Tax Act, 1947.
It has also been contended by the respondent that there being three different kinds of water, namely aerated water, mineral water, and water, contemplated in Entry 39 of the tax-free list and Entry 4 of the taxable list, and the words “in bottles or in a sealed containers which is being used obviously it mean “being packaged form”. The “packaged drinking water” which is sold by the company under the brand name Kinley Water does fall within the ambit of Entry 39 of the Tax-Free List and not within Entry 4 of the Taxable List.
In the present case, the department also referred to the information which is available on the web portal of the company, wherein it is mentioned that “every drop of Kinley goes through a rigorous and intensive 10-step purification process with various stages of filtration, disinfection, and mineralization.
However, the subject commodity is nothing but mineral water and the same would be witing the scope of Entry 4 of the List of Goods subject to the Levy of Sales Tax, wherein attracting a levy of 12% tax.
The court also noted that it has been failed by the department for appreciating that the processes described by the company are nothing more than the purification of water to make it more potable through the process which is being taken by the company for making water possible to reach the people for safe drinking purposes.