1991 (3) TMI 350 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of turnover of sales of country drugs under the Tamil Nadu General Sales Tax Act, 1959. Interpretation of item 95 of the First Schedule. Applicability of multi-point levy. Assessment under section 7-A of the Act.

Analysis:
In T.C. (R) No. 1116 of 1981, the assessing authority assessed the turnover of sales of country drugs unani medicine at 8 per cent. The Appellate Assistant Commissioner set aside the assessment on the turnover of Rs. 27,328, stating that the assessee was not a licensee under the Drugs and Cosmetics Act, hence not assessable under item 95. The Tribunal, in a detailed order, restored the assessment at 8 per cent and maintained the assessment under section 7-A. The Court held that the country drugs manufactured by the assessee were taxable at 8 per cent under item 95, irrespective of the Drugs and Cosmetics Act license requirement. The petition was dismissed.

In T.C. (R) No. 1117 of 1981, the assessing authority assessed the sale turnover of country drugs at 8 per cent. The appellate authority set aside the tax on a turnover of Rs. 15,019, redetermining it at Rs. 1,500. The Tribunal restored the assessing authority's decision, re-fixing the taxable turnover at Rs. 16,519. The Court upheld the Tribunal's decision, applying the interpretation of item 95 to include medicinal mixtures or compounds, covering the unani medicines sold by the assessee. The petition was dismissed.

The Court analyzed item 95 of the First Schedule, emphasizing that it covers medicinal mixtures or compounds, not just allopathic medicines. The requirement of a Drugs and Cosmetics Act license is irrelevant for sales tax liability determination. The Court concluded that the country drugs manufactured by the assessee were taxable at 8 per cent under item 95. Both petitions were dismissed without costs.