2019 (5) TMI 361 - HC - VAT / Sales Tax

Classification of goods - Himani Boroplus Antiseptic Cream - Himani Navratna Oil - Himani Boroplus Prickly Heat Powder - Himani Gold Turmeric Cream - Himani Nirog Dant Powder Lal - whether the above products manufactured and sold by the applicant company are classifiable under the Entry relating to 'Drugs and Medicines' i.e. Entry 11 Part IV of Schedule II? HELD THAT - The classification of the products under the statute cannot be read into other statute. Each statute has to be interpreted on the basis of provisions contained therein and therefore, once M.P. Commercial Tax Act includes the articles manufactured by the applicant under Schedule II Part III at Entry No.41 and 49, the question of treating them under Schedule II Part IV Entry 11 does not arise. Entry 41 and Entry 49 include the products manufactured by the present applicant and the rate of tax is 12%. As the products manufactured by the present applicant falls under the specific entry under the schedule, the question of taking aid of the Central Excise Tariff Act, 1985 does not arise in light of the judgment delivered by the Division Bench of this Court in the case of State of M.P. Vs. Vicco Products (Bombay) 2017 (5) TMI 376 - MADHYA PRADESH HIGH COURT and therefore, this Court is of the opinion that the products manufactured by the applicant company as it falls in Schedule II Part III at Entry No.41 and 49, tax has to be levied at 12% as it does not fall under Schedule II Part IV at Entry 11, the duty is certainly not at all levied at 8%. Reference answered.

Summary

Issues Involved:
1. Classification of goods under the M.P. Commercial Tax Act, 1994.
2. Applicability of previous judgments on similar issues.
3. Interpretation of statutory provisions and entries.

Detailed Analysis:

1. Classification of Goods under the M.P. Commercial Tax Act, 1994:
The primary issue was whether the five specified goods manufactured by the applicant should be classified under Entry 4/7 (from 1.1.2000 to 14.03.2000) or Entry 41/49 (15.03.2000 to 31.03.2006) of Part III Schedule II, instead of Entry 11 of Part IV Schedule II. The products in question were Himani Boroplus Antiseptic Cream, Himani Navratna Oil, Himani Boroplus Prickly Heat Powder, Himani Gold Turmeric Cream, and Himani Nirog Dant Powder Lal. The applicant argued that these products, manufactured under a valid drugs license, should be classified as 'Drugs and Medicines' under Entry 11 Part IV of Schedule II. However, the court concluded that these products fall under Entry 41 and Entry 49 of Part III Schedule II, which includes "Scents, perfumes, hair tonics, hair creams, hair oils, hair shampoo, depilatories, face creams, etc." and "Tooth paste, tooth powder, hair oils, face powder, talcum powder, toilet soap, washing soap, and other toilet articles including medicinal preparation thereof, combs, brushes, razors, and razor blades," respectively, with a tax rate of 12%.

2. Applicability of Previous Judgments on Similar Issues:
The court referred to the Division Bench judgment in the case of State of Madhya Pradesh Vs. Vicco Products (Bombay), which dealt with similar issues. The judgment emphasized that the classification of products under one statute cannot be read into another statute. Each statute must be interpreted based on its provisions. The court found that the products manufactured by the applicant fall under the specific entries in the M.P. Commercial Tax Act, and thus, the question of treating them under Schedule II Part IV Entry 11 does not arise. The court also noted that previous judgments, such as those in the cases of Commissioner of Central Excise Vs. Vicco Laboratories and Union of India & Anr. Vs. Vicco Laboratories, dealt with classification under the Central Excise Tariff Act and were not relevant for interpreting the M.P. Commercial Tax Act.

3. Interpretation of Statutory Provisions and Entries:
The court highlighted that the statutory provisions under the M.P. Commercial Tax Act are clear and categorical. Entry 41 and Entry 49 of Part III Schedule II specifically include the products manufactured by the applicant, and the rate of tax is 12%. The court rejected the argument that the products should be given a trade meaning and treated as such, stating that such an examination is only required if the statute is silent. Since the statute explicitly specifies the classification and tax rate, the court concluded that the products fall under the specified entries, and the question of taking aid of the Central Excise Tariff Act does not arise.

Conclusion:
The court concluded that the products manufactured by the applicant fall under Entry 41 and Entry 49 of Part III Schedule II of the M.P. Commercial Tax Act, with a tax rate of 12%. The reference was answered accordingly, and the question of treating the products under Schedule II Part IV Entry 11, with a different tax rate, was dismissed.