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TMI Blog1998 (5) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... irst petitioner are carrying on business in the said products Vicco Vajradanti and Vicco Turmeric as stock-holders and dealers and market the products. The second petitioner is the manufacturer of the said products. After the introduction of chapter IV-A in the State of Maharashtra the second petitioner applied and obtained a licence to manufacture the above products as ayurvedic drugs. According to the petitioner Vicco Vajradanti comprises of 18 ayurvedic ingredients and it is used for the treatment of tooth disorder like pyorrhoea, swelling gums, bleeding gums, etc. Similarly, Vicco Turmeric is also manufactured from ayurvedic ingredients. It is used for the treatment of diseases relating to the skin eczema, itches, pimples, etc. Even under the Central Excises and Salt Act, 1944, the department sought to classify the items as cosmetic and tooth pastes, but the Bombay High Court held in a judgment dated April 27, 1988 that they are only ayurvedic medicines. The Special Leave Petition filed by the department to the apex Court was dismissed on September 6, 1990. But the attempt of the petitioners to get classification under Indian Standard Institute as a tooth paste or a cosmetics w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of assessment. It is also pointed out that the decisions of the Appellate Tribunal, Chennai in T.A. Nos. 355 and 361 of 1992 dated June 15, 1992 cannot help the petitioners because the entries have been changed from March 12, 1993. It is also argued that the decisions of various other High Courts, cannot be compared and applied in the present case because the entries are different. So far as the question of the vires of the relevant entries, the counter-affidavit points out that it is the prerogative of the Legislature to pick and choose any article for the application of any rate of tax having regard to the economic conditions of the State. Equally the fact that the petitioners have not collected tax at the higher rate is not a ground to give the benefit of a lower rate to the petitioners. Argued the Revenue, that words of everyday use must be understood and given a meaning which is acceptable in common parlance. In other words, the words must be understood in the popular sense. 5.. Mr. C. Natarajan, the learned counsel appearing for the petitioners has taken us through the relevant entries and the decisions of various authorities relating to the very same products for buttre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries are of a general nature and all categories of goods which fall under the entry become chargeable to tax at the particular rate. It is not as if Vicco Vajradanti and Vicco Turmeric alone have been chosen for the imposition of the particular levy. The offending words, viz., excluding products capable of being used as creams, hair oils, tooth pastes, tooth powder, cosmetics, toilet articles, soaps and shampoos do apply to every such article which fall within the above exclusions. Therefore, it is idle to contend that those words are liable to be struck down as arbitrary or unreasonable. Similarly, the words found in the explanation to the first entry in Part F of the First Schedule cannot also be held to be void or ultra vires the Constitution of India, because the goods which come under the category of section 3 of the Drugs and Cosmetics Act, 1940, cannot be treated as one class of goods for the purpose of taxing statute. Among such goods it is open to the Legislature to pick such of those goods which are liable to different rates of duty, being comparable to other such goods available in the market. 7.. In this connection, Mr. C. Natarajan, learned counsel for the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. If we now take up the correctness of the impugned proceedings of the Deputy Commercial Tax Officer dated August 16, 1996 our task is much simpler because of the simple and clear terms in which the entries are worded. We will first take up entry 20, Part 'C' of the First Schedule. It is under this entry that the petitioner wants classification and have the benefit of the rate of tax as 5 per cent. This entry is as follows: Sl. No. Description of the goods Point of levy Rate of tax. 20 (A) Medicines conforming to the following description: Any medicinal formulation or preparation ready for use internally or externally for treatment or mitigation or prevention of diseases or disorders in human being or At the point of first sale in the State 5% Sl. No. Description of the goods Point of levy Rate of tax. animals (excluding products capable of being used as creams, hair oils, tooth pastes, tooth-powders, cosmetics, toilet articles, soaps and shampoos), but including(i) Allopathic medicine (ii) Other medicines and drugs including ayurvedic, homeopathic, siddha and unani preparations. (iii) Medicinal mixtures or compounds, the components of which have not already suffered tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or doubt about this entry. The argument before us proceeds as follows: According to the petitioner the product Vicco Vajradanti is not medicated, but it is medicine itself. In our opinion that will not make a difference because we have already held that even a medicine which is capable of being used as creams, hair oils, tooth-paste, tooth-powders, etc., is not chargeable under entry 20. Part C of the First Schedule. Therefore, entry 7 of Part E only makes it abundantly clear that all tooth pastes, tooth powders, etc., whether injected with medicinal quality or not become chargeable under the said entry at the rate of 12 per cent. 10. The next entry is entry 1, Part F of the First Schedule which is as follows: Sl. No. Description of the goods Point of levy Rate of tax. 1 (i) Scents and perfumes in any form excluding doop and agarbathis but including aragaja, javvadu and punugu; At the point of first sale 16% (ii) Hair oils, hair creams, hair dyes, hair dark in the eners, hair tonics, brilliantines, pomades and State vaselines; (iii) Lipsticks, lipsalve, nail polishers, nail varnishes, nail brushes, beauty boxes, face powders, toilet powders, baby powders, talcum powders, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.. Reference is then made to a letter of the second petitioner addressed to the Indian Standard Institute. The letter is also pregnant with meaning and information for the purpose of classifying the products under the particular entries in the Tamil Nadu General Sales Tax Act, 1959. The letter is as follows: We are manufacturing Vicco Vajradanti tooth paste and turmeric vanishing cream under Ayurvedic Drug Licence A/237, issued by the Food and Drugs Administration, Maharashtra State, Bombay. We shall thank you to please let us know whether you would treat Vicco Vajradanti tooth paste as product falling under IS: 6356-1978 and Vicco Turmeric Vanishing Cream as product falling under IS: 6608-1978 and issue us licences to use S1 marks for the said two products . We are emphasising the words even as described by the second petitioner, viz., Vicco Vajradanti tooth paste and Vicco Turmeric Vanishing Cream. Therefore, it is not open to the petitioners now to contend that vicco vajradanti is not a tooth paste and Vicco Turmeric is not a vanishing cream. The fact that I.S.I. refused I.S.I. marks on the ground that the products were manufactured under a ayurvedic drug licence does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... official gazette . We have only to repeat that those decisions are with reference to the entries in those enactments. 14.. Much reliance was placed on the decision of the Supreme Court reported in B.P.L. Pharmaceuticals Ltd. v. Collector of Central Excise, Vadodara [1997] 104 STC 164. That case arose out of the Central Excises and Salt Act. The question was whether the product Selenium Sulfide Lotion U.S.P. will fall under sub-heading 3305.90 or 3003.19. In our opinion a reference to those sub-headings clearly shows that they cannot advance the case of the petitioners herein. The heading 33.03 was as follows: 2. Heading Nos. 33.03 to 33.08 apply, inter alia, to products, whether or not mixed (other than aqueous distillates and aqueous solutions of essential oils), suitable for use as goods of these headings and put up in packings with labels, literature or other indications that are for use as cosmetics or toilet preparations............ Reported as United Trading Agency v. Additional Commissioner of Commercial Taxes [1997] 104 STC 182 (Kar). The heading 33.05 is as follows: Preparations for use on the hair, including brilliantines, perfumed hair oils, hair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on . Reported as Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes) v. V.V. Kammath Sons [1998] 111 STC 44 (Ker). No doubt the apex Court distinguished that case while deciding Metagraphs Pvt. Ltd. case [1997] 106 STC 180. 17.. The West Bengal Taxation Tribunal had an occasion to test the correctness of the levy of Nycil powder under the Taxes on Entry of Goods into Calcutta Metropolitan Area Act, 1972. Entry 41(e) authorised a levy on preparation whether medicated or not for the care of skin . Observed the Tribunal in Glaxo India Limited v. State of West Bengal [1997] 107 STC 106: The question before us is not whether Nycil medicated powder for the care of skin is a toilet or a cosmetics or a drug. The only question before us is whether Nycil medicated powder for the care of skin can be treated as a specified goods under Sl. No. 41(e) of the Schedule to the Act of 1972. We have already referred above that it is both parties case that Nycil is a medicated preparation of powder for the care of skin and this being the position, the respondents have rightly treated the same as taxable under the Act of 1972 under Sl. No. 41(e) of the Schedule to the said Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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