1957 (10) TMI 23 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether Badshahi soap and Badshahi powder are liable to special sales tax under section 6 of the Bombay Sales Tax Act.
2. Whether the articles in question fall under the category of toilet articles.
3. Whether the articles in question qualify as soaps under the exception in Schedule I.

Analysis:
The judgment pertains to a reference under section 34 of the Bombay Sales Tax Act, 1953, to determine the tax liability of Badshahi soap and Badshahi powder. The central issue is whether these articles are subject to special sales tax under section 6 of the Act or are only liable to general sales tax. Section 6 distinguishes between general tax and special tax based on the goods specified in Schedule I. The relevant entry in Schedule I includes "Perfumery, cosmetic and toilet articles, except soaps." The first question is whether the articles in question are toilet articles, which is crucial for determining their tax treatment.

The composition of the articles includes "Barium sulphide combined with the whiting powder and vaseline," with properties primarily for depilatory purposes. The court deliberates on the definition of "toilet articles," emphasizing their use in cleansing and grooming one's person. The court refers to the Webster's Dictionary definition of "toilet" to establish that depilatories can be considered toilet articles due to their cleansing function. Therefore, the court concludes that the articles in question qualify as toilet articles, falling within the scope of Schedule I.

Moving on to the second issue, the court examines whether the articles can be classified as soaps under the exception in Schedule I. Despite one of the articles being labeled as Badshahi soap, the court emphasizes that the name does not determine the tax liability; rather, the characteristics of the article are pivotal. The court refers to the definition of "soap" in Webster's Dictionary, highlighting the process of alkali acting on fat to create a cleansing agent. The court notes that the absence of fat in the articles precludes them from being classified as soaps based on the traditional definition.

In conclusion, the court rules that the articles in question do not meet the criteria to be classified as soaps and are thus subject to special sales tax under the Act. The judgment answers the reference questions affirmatively and negatively, respectively, holding the applicants liable to pay costs. The reference is answered accordingly, establishing the tax treatment of Badshahi soap and Badshahi powder under the Bombay Sales Tax Act.