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Issues Involved:
1. Classification of "Boroplus" as either a medicine or a cosmetic. 2. Interpretation of relevant legal definitions and precedents. Issue-Wise Detailed Analysis: 1. Classification of "Boroplus" as either a medicine or a cosmetic: The primary issue in this case is whether "Boroplus" should be taxed as a medicine or as a cosmetic under the U.P. Trade Tax Act. The Tribunal had classified "Boroplus" as a medicine, but the revision challenges this classification, arguing it should be taxed under the entry for "All kinds of cosmetics and toilet preparations." 2. Interpretation of relevant legal definitions and precedents: Arguments by Learned Standing Counsel: - "Boroplus" is a Himani product used as a cream to protect the face and skin from dryness. - It is not used to cure or prevent any disease and is commonly available in cosmetic shops. - Previous court rulings, such as in M/s. Balaji Agency, Gorakhpur v. CST (1994 UPTC 184), have classified similar products as cosmetics. Arguments by Dealer's Counsel: - Manufacturing "Boroplus" requires a drug license. - It is used to avoid dryness and fissures of the skin, supporting its classification as a medicine. - Cited various decisions, including Union of India v. G.D. Pharmaceuticals Limited (118 STC 19) and Commissioner of Commercial Taxes, West Bengal v. West Bengal Commercial Taxes Tribunal (89 STC 355), to support their claim. Relevant Notifications: - Notification No. ST-II-5785/X-10(1)-80-U.P. Act XV/48-Order-81, dated 7th September 1981, lists "Medicines and Pharmaceutical preparations including insecticides and pesticides" with a tax rate of 6%. - Notification No. ST-II-5784/X-10 (1)-80-U.P. Act 15/48-Order-891, dated 7-9-1981, classifies "All kinds of cosmetics and toilet preparations for beautification or care of the face, skin, hair, nails, eyes or brows" with a tax rate of 12%. Dictionary Definitions: - "Cosmetic" is defined as substances intended to beautify or improve the appearance of the face, skin, or hair. - "Medicine" is defined as substances used in treating disease or illness. Judicial Precedents: - The Supreme Court in Ram Avtar Budhai Prasad v. Assistant Sales Tax Officer (12 STC 286) emphasized the common parlance test for classification. - In Commissioner of Sales Tax v. Sarin Chemical Laboratories (24 STC 406), toothpaste and tooth powder were classified as toilet requisites despite possessing medicinal properties. - The Supreme Court in State of Goa v. Colfax Laboratories Limited (AIR 2004 SC 45) held that after-shave lotions are toilet preparations, not medicinal preparations. - In Shree Baidyanath Ayurved Bhawan Pvt. Ltd. v. Collector of Central Excise (1991 (51) E.L.T. 502), Lal Dant Manjan was classified as a toilet requisite, not a drug or ayurvedic medicine. Court's Analysis: - The court considered the common parlance and commercial sense in which "Boroplus" is known, emphasizing that it is generally available in cosmetic shops and used for skin care rather than treating diseases. - The court noted that while "Boroplus" may have some antiseptic properties, this alone does not qualify it as a medicine. - The entry for cosmetics is broad enough to include products used for skin care, even if they have some medicinal properties. Conclusion: - "Boroplus" is classifiable as a cosmetic and not as a medicine. - The Tribunal's order is set aside, and the product is to be taxed under the entry for cosmetics. Final Judgment: The revision is allowed, and the Tribunal is directed to pass an appropriate order under Section 11(8) of the Act, classifying "Boroplus" as a cosmetic.
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