1975 (11) TMI 152 - HC - VAT and Sales Tax

Summary

Issues:
1. Classification of goods as scents or perfumes for sales tax purposes.

Analysis:
The judgment dealt with the issue of whether certain goods sold by the petitioner-assessee, described as royal series musk and cobra brand, among others, manufactured by S.K. Kelkar & Co. Private Ltd., Bombay, should be classified as scents or perfumes for the purpose of sales tax. The assessing authorities sought to tax the turnover of these goods at a single point under entry 51 of the First Schedule to the Sales Tax Act. The assessee argued that these goods were primarily used in the manufacture of scented sticks and were not suitable for direct use on human bodies, thus contending that they should not be classified as scents or perfumes. However, the authorities determined that these goods fell under the description of scent or perfume and were liable for sales tax. The counsel for the assessee argued that true scents or perfumes contain alcohol as a basic element, while the goods in question were alcohol-free and contained oil as a basic element, thus not meeting the criteria for classification as scents or perfumes.

The counsel for the assessee relied on a previous decision of the court in the case of Mettur Sandalwood Oil Co. v. State of Madras, which discussed the constituents of a perfume, including a vehicle or solvent, a fixative, and an odoriferous element. The court in that case held that sandalwood oil, though serving as a fixative or odoriferous element, could not be considered a perfume due to its vaporization properties. However, the Supreme Court in a later decision in Commissioner of Sales Tax v. Indian Herbs Research & Supply Co. provided a simpler test for determining what constitutes a perfume. The Supreme Court held that a perfume should be construed in its ordinary sense as any substance, natural or prepared, capable of emitting an agreeable odor either when burned or through the application of some foreign matter to induce a chemical reaction releasing fragrant odors from the substance.

Applying the test laid down by the Supreme Court, the court in this judgment found that the goods in question, upon testing the samples, emitted a sweet and pleasant smell without requiring significant heat for the odoriferous element to evaporate. Therefore, the court concluded that these articles were indeed perfumes within the meaning of entry 51 of the First Schedule to the Sales Tax Act. As a result, the petitions were dismissed, and costs were awarded to the respondent.