1993 (9) TMI 353 - HC - VAT and Sales Tax

Summary

Issues:
1. Classification of certain items as Ayurvedic medicines or cosmetics for taxation purposes.

Analysis:
The judgment pertains to a revision petition under Section 11 of the U.P. Sales Tax Act challenging an order passed by the Sales Tax Tribunal. The dispute revolves around the classification of specific items as either Ayurvedic medicines or cosmetics for taxation. The items in question include Himtaj Oil, Himani Boroplus Antiseptic Cream, Emami Naturally Fair Ayurvedic Cream, Himani Cold Turmeric Ayurvedic Cream, and Vaseline (Petroleum Jelly).

The petitioner argued that all the items were manufactured under drug licenses and should be considered medicines due to their intended use in treating diseases or relieving pain. However, the Tribunal categorized the items as cosmetics, except for Himtaj Oil, which was considered a cosmetic by the Tribunal despite being claimed as a medicinal oil by the Assistant Commissioner (Judicial).

Regarding Vaseline (Petroleum Jelly), it was specifically classified as a cosmetic and a toilet requisite under a notification, making it ineligible for consideration as a medicine. The petitioner failed to demonstrate that Emami Naturally Fair Cream, Himani Cold Turmeric Cream, and Himani Boroplus Antiseptic Cream had medicinal properties justifying their classification as medicines. The Tribunal's decision to label these items as cosmetics was upheld based on their general use for skin care rather than disease treatment.

The crucial point of contention was Himtaj Oil, with the Assistant Commissioner (Judicial) viewing it as a medicinal oil primarily used to relieve pain. Despite the Tribunal's assertion that the oil was more akin to a cosmetic, the judgment highlighted that the occasional use of such oils for hair care does not alter their fundamental medicinal character. Consequently, the Tribunal's decision on Himtaj Oil was deemed erroneous, and it was directed to be taxed at the rate applicable to medicines.

In conclusion, the revision was partly allowed, modifying the Tribunal's order concerning Himtaj Oil and directing appropriate tax treatment.