1974 (2) TMI 63 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the term "cosmetics and toilet requisites" under Notification No. 905/X dated 31st March, 1956 for tax purposes.

Analysis:
The judgment pertains to a reference under section 11(4) of the U.P. Sales Tax Act regarding the taxability of hairpins, hairclips, and tikulis as cosmetics and toilet requisites. The dispute revolves around whether these items should be taxed at 2%, as contended by the assessee, or at 6% or 7% as argued by the department under Notification No. 905/X dated 31st March, 1956. The Division Bench of the Allahabad High Court previously held that only items consumed in the application process qualify as cosmetics and toilet requisites. However, the Supreme Court's rulings, particularly in the State of Gujarat v. Prakash Trading Co. case, expanded the definition to include items like toothbrushes. The case was referred to a larger Bench due to this discrepancy, leading to the current judgment.

The court analyzed the definition of "cosmetics and toilet requisites" based on common parlance understanding since the term was not explicitly defined in the Act. It referenced the Webster's International Dictionary definitions of cosmetics and toilet, highlighting that cosmetics are preparations for beautification or alteration of appearance, while toilet requisites are used in dressing, cleansing, and grooming. The court noted that hairpins and hairclips serve to hold hair in place after grooming, falling under the category of toilet requisites rather than cosmetics. It emphasized that these items are essential for grooming and arranging oneself, distinct from cosmetics that are typically consumed during application.

The judgment distinguished between cosmetics and toilet requisites, asserting that while some items may overlap, appliances like toothbrushes, hairpins, and hairclips primarily serve a toiletry function. The court rejected the narrow interpretation from the previous Division Bench case and aligned its decision with the broader understanding of toilet requisites encompassing grooming and personal care items. Consequently, the court ruled that hairpins and hairclips are classified as "toilet requisites" under item No. 6 of Notification No. 905/X dated 31st March, 1956. The Commissioner of Sales Tax was awarded costs amounting to Rs. 200, and the reference was answered accordingly.