1968 (7) TMI 58 - HC - VAT and Sales Tax

Summary

Issues Involved
1. Classification of Palmolive shampoo under the Bombay Sales Tax Act, 1959.
2. Classification of Colgate tooth-paste and Colgate tooth-brush under the Bombay Sales Tax Act, 1959.

Issue-wise Detailed Analysis

1. Classification of Palmolive Shampoo
The primary issue was whether Palmolive shampoo should be classified as a "toilet article" under entry 21A of Schedule E, or as "soap" under entry 28 of Schedule C, or if it falls under the residuary entry 22 of Schedule E.

Tribunal's Findings: The Tribunal had held that the shampoo was a toilet article and not soap, as various ingredients went into its making, distinguishing it from soap.

Court's Analysis:
- Definition and Context: The court examined the definition of "toilet articles" and the legislative intent behind entry 21A. It was noted that "toilet articles" should be those directly used in grooming a person to beautify their appearance, not merely for cleansing.
- Noscitur a Sociis Principle: The court applied the principle of noscitur a sociis, which means that a word is known by the company it keeps. Given that "toilet articles" were listed alongside "perfumes, depilatories, and cosmetics," the term "toilet articles" was interpreted narrowly to include only items directly used for grooming.
- Exclusion of Soap: Entry 21A specifically excludes soap, indicating that any toilet article that is also soap should fall under entry 28 of Schedule C.
- Conclusion: The court concluded that Palmolive shampoo is a type of soap and should be classified under entry 28 of Schedule C. It is not covered by entry 21A or the residuary entry 22 of Schedule E.

Judgment: Palmolive shampoo is not a toilet article within the meaning of entry 21A of Schedule E but is a soap within the meaning of entry 28 of Schedule C and is not covered by the residuary entry 22 of Schedule E.

2. Classification of Colgate Tooth-paste and Colgate Tooth-brush
The issue was whether Colgate tooth-paste and Colgate tooth-brush should be classified as "toilet articles" under entry 21A of Schedule E or if they fall under the residuary entry 22 of Schedule E.

Tribunal's Findings: The Tribunal held that these items were toilet articles.

Court's Analysis:
- Primary Function: The court noted that the primary function of a tooth-paste and tooth-brush is dental hygiene, which involves cleansing the teeth rather than grooming a person.
- Commercial Parlance: It was argued that these items should be considered in their ordinary commercial sense. However, the court emphasized that "toilet articles" must be directly used in the process of grooming, not merely cleansing.
- Narrow Interpretation: Following the same narrow interpretation applied to the shampoo, the court held that tooth-paste and tooth-brush do not groom a person and therefore do not fall under "toilet articles."
- Conclusion: These items are not "toilet articles" and should be classified under the residuary entry 22 of Schedule E.

Judgment: Colgate tooth-brush and Colgate toothpaste are not toilet articles falling in entry 21A of Schedule E but are covered by the residuary entry 22 of Schedule E and are liable to be taxed accordingly.

Final Judgment
- Palmolive Shampoo: Classified as soap under entry 28 of Schedule C.
- Colgate Tooth-paste and Tooth-brush: Classified under the residuary entry 22 of Schedule E.

Costs: The State shall pay the costs of this reference to the assessee.

Reference Answered Accordingly.