1996 (4) TMI 480 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Classification of "Swad" tablet as a confectionery or ayurvedic medicine.
2. Tax rate applicable to "Swad" tablet.
3. Claim of exemption from tax on the ground of "Swad" being sugar.
4. Admissibility of revision applications based on findings of fact.

Detailed Analysis:

1. Classification of "Swad" Tablet:
The primary issue was whether "Swad" tablet should be classified as a confectionery or an ayurvedic medicine. The petitioner argued that "Swad" is manufactured according to the formula in the authoritative Ayurvedic text "Bhav Prakash" and is patented as an ayurvedic medicine under the Drugs and Cosmetics Act, 1940. However, the tribunal noted that the petitioner did not provide the specific formula from "Bhav Prakash" and admitted that the formula was modified. The tribunal emphasized that for a product to be classified as an ayurvedic medicine, it must be manufactured strictly according to the formula in the authoritative texts without modifications. Therefore, "Swad" could not be considered an ayurvedic medicine.

2. Tax Rate Applicable:
The tribunal upheld the decision of the assessing authority, Deputy Commissioner (Appeals), and the Tax Board that "Swad" tablet is a confectionery article and is subject to tax at the residuary rate of 10%, not the 6% rate applicable to medicines and drugs. The tribunal referred to the common parlance test and trade meaning, concluding that "Swad" does not meet the criteria of a medicine as it lacks curative power and is not used in the prevention or treatment of diseases.

3. Claim of Exemption from Tax:
The petitioner alternatively claimed that "Swad" should be exempt from tax as it contains 97% sucrose, qualifying it as sugar. The tribunal dismissed this claim, noting that the petitioner had never claimed exemption on this ground before and had always paid tax treating "Swad" as a medicine. The tribunal referred to the Central Sales Tax Act, 1956, and the Central Excise Tariff Act, 1985, which define sugar and sugar confectionery. Since "Swad" did not meet the definition of sugar under these Acts, it was not entitled to tax exemption.

4. Admissibility of Revision Applications:
The tribunal held that the findings of fact by the Commercial Taxes Officer, Deputy Commissioner (Appeals), and the Tax Board were concurrent and well-supported by evidence. The petitioner failed to show how these findings were contrary to law or perverse. The tribunal emphasized that mere obtaining of licenses under other Acts does not automatically entitle a person to benefits under the Rajasthan Sales Tax Act, 1954.

Conclusion:
The tribunal dismissed the applications for revision, affirming that "Swad" tablet is a confectionery article subject to tax at the residuary rate of 10%. The tribunal found no merit in the petitioner's claims and upheld the decisions of the lower authorities. The applications for revision were dismissed with no order as to costs.