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TMI Blog1982 (4) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... tedly being sterilised distilled water free from pyrogens even after redistillation, remained distilled water. By itself, water for injection had no pharmaceutical or medicinal properties and could not be treated as a drug or medicine or pharmaceutical preparation. In Delhi Cloth and General Mills Co. Ltd. v. State of Rajasthan [1980] 46 STC 256 (SC); AIR 1980 SC 1552, it was ruled that: "............in determining the meaning or connotation of words and expres sions describing an article or commodity the turnover of which is taxed in a sales tax enactment, if there is one principle fairly well-settled it is that the words or expressions must be construed in the sense in which they are understood in the trade, by the dealer and the consumer. It is they who are concerned with it, and it is the sense in which they understand it that constitutes the definitive index of the legislative intention when the statute was enacted. As sales tax the liability falls on the seller, who in his turn passes it on to the consumer. As purchase tax, the liability falls directly on the purchaser. A long train of authorities supports that view, and we need refer only to the recent judgment of this C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was material, is in these terms: "Explanation.-In this section, the expression- (a) 'water' does not include mineral water, aerated water, tonic water, distilled water or scented water." In the present case, the applicant does not contend that water for injection marketed by it is exempt from the levy of sales tax under this provision. In H.T. Chemical Laboratories v. State of U.P. [1972] 29 STC 148, a Division Bench of this Court was called upon to consider the question whether distilled water was a medicine or a pharmaceutical preparation so as to attract the taxing provisions under the U.P. Sales Tax Act. The case of the department was that a notification dated 10th May, 1956, which levied tax on the sale of medicine and pharmaceutical preparations at the point of sale by manufacturer or importer justified the levy of tax upon the applicant. The Bench negatived this explanation by observing thus: "In our opinion, distilled water is nothing but a purified form of water. The process of distillation does not change its nature, nor does it involve any process of manufacture. Distillation is a process by which impurities from water are removed so that it can safely be used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y this Court in the two decisions aforesaid. The Drugs and Cosmetics Act, 1940 (Central Act No. 23 of 1940), controls the import, manufacture, distribution and sale of drugs or cosmetics. In section 3(b) it describes "drug" as including all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of disease in human beings or animals. Section 18 of this Act requires a person not to manufacture for sale, or sell or stock or exhibit for sale or distribute any drug except in accordance with the conditions of a licence issued for the purpose. Rules have been framed by the Central Government for the purpose of giving effect to the provisions of the chapter, in which occurs section 18, in exercise of the powers under section 33 of the Act and rule 61(2) of the Drugs and Cosmetics Rules, 1945, so framed provides for a licence to sell or exhibit for sale or distribute drugs specified in Schedules C and C(1) by retail. Schedule C, forming part of these Rules mentions amongst others (at item No. 12), "any other preparation which is meant for parenteral administration as such or afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... medicine. It has also been urged that assuming that for purposes of the Drugs and Cosmetics Act and the English Pharmacopoeia, water for injection may be a drug, yet, for purposes of the U.P. Sales Tax Act, that would not be material. It has been urged that the definition of an expression in one Act cannot be read into another and reliance in this regard has been placed on decision of the Supreme Court in Union of India v. R.C. Jain [1981] 2 SCC 308. The submission further is that as far as this Court is concerned, the question is concluded against the applicant-dealer by the two decisions noticed earlier. So far as the two decisions of this Court are concerned, it has been seen above that the question which is being agitated in the present case was not up for consideration in them. In the first of those decisions, the question was whether distilled water was liable to be taxed as medicine or a pharmaceutical preparation. The case related to the year 1967-68. This Court took the view that distilled water was nothing but water within the meaning of section 4 of the Act. Soon after the decision, which was rendered in the year 1971, section 4 was substituted with retrospective effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority". The Supreme Court took the view that in a case like the one before it aid could only be taken of the definition of the expression "local authority" contained in the General Clauses Act and in that context observed that the definition of an expression in one Act should not be imported into another. The principle of that case cannot legitimately be imported in a case like the present which is concerned with a taxing statute in which case the Supreme Court has itself made reference to cognate Acts for finding out the true meaning to be given to a commodity sought to be subjected to tax. The Tribunal has observed in its order, at one place, that in common parlance also it (water for injection) is never called a drug or a medicine. It has not dealt with the matter any further. It is not possible, therefore, to take this observation as a conclusion of fact arrived at by the Tribunal on consideration of relevant material as is attempted to be urged by the learned standing counsel. In fact, the Tribunal has not gone into the question from this point of view at all. The concept of medicine is not static. It is a changing concept linked with the advancing human knowledge and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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