2017 (11) TMI 1091 - HC - VAT and Sales Tax

Classification of goods - Parachute Coconut Oil - Medikar - Held that - Entry 43 of Schedule II Part A of the U.P. VAT Act, 2008 mentions edible oil and oil cake therefore if Parachute pure coconut oil which is marked as edible on its packaging cannot be lebeled as hair oil and therefore an unclassified item liable to tax at 12.5% it must necessarily be classified as edible oil under Entry no. 43 of Schedule II Part A - Parachute oil would be liable to tax at 4% and not as an unclassified item taxable at 12.5%. Medikar - Held that - Mediker which is used for anti-lice treatment is a drug because of its medicinal affect - Once it is a drug, it cannot be a shampoo. As a natural corollary, it will not invite the liability of levy of entry tax. Revision dismissed - decided against Revenue.

Summary

Issues:
1. Condonation of delay in filing trade tax revisions.
2. Classification of 'Parachute Oil' as hair oil or edible oil.
3. Classification of 'Medikar' as medicine or shampoo.

Issue 1: Condonation of Delay
The High Court considered the condonation of delay in filing the trade tax revisions, which were beyond the statutory period. The counsel for the respondent did not object to condoning the delay and requested a decision on merits. The delay was condoned, and the matter proceeded on merits after filing a supplementary affidavit.

Issue 2: Classification of 'Parachute Oil'
The Court addressed the classification of 'Parachute Coconut Oil' as either 'hair oil' or 'edible oil.' The counsel for the respondent cited a previous judgment where it was held that Parachute Coconut Oil should be taxed as 'hair oil' and not under the category of 'oils of all kinds.' However, the counsel argued that it should be classified as edible oil under a specific entry, leading to a lower tax rate.

Issue 3: Classification of 'Medikar'
Regarding the classification of 'Medikar,' the Court referred to a judgment by the Honorable Apex Court, which determined that 'Medikar' is used for anti-lice treatment and qualifies as a drug due to its medicinal effect. The Court emphasized that once a product is classified as a drug, it cannot be considered a shampoo, thereby exempting it from entry tax liability.

The Court noted that previous judgments by the High Court and the Honorable Apex Court had settled the issues of classification for both 'Parachute Oil' and 'Medikar.' The counsel for the revisionist acknowledged the legal positions established by these judgments. Consequently, the Court dismissed the trade tax revisions based on the precedents and legal principles discussed in the judgment.

In conclusion, the High Court dismissed the trade tax revisions, citing the settled legal positions from previous judgments and the lack of dispute regarding the classification of the products in question. No costs were awarded in this matter.