9911796707
TMI Blog2014 (6) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... s viz. C-I-24 and C-II-36 appended to Bombay Sales Tax Act 1959, was the Tribunal justified in law in holding that the "RA THERMOSEAL" is a Tooth Paste covered by schedule entry C-II-36 and not a medicine covered by schedule entry C-I-24 for the sole reason of its being capable of being used as tooth paste and its being covered by the exclusion in schedule entry C-I-24 ? (3) Whether on the facts and circumstances of the case and on a true and correct interpretation of the two schedule entries viz. C-I-24 and C-II-36 appended to Bombay Sales Tax Act 1959 was the Tribunal justified in law in holding that the "THERMOSEAL" is a Tooth Paste covered by schedule entry C-II-36 and not a medicine covered by schedule entry C-I-24 for the sole reason of its being capable of being used as a tooth paste and its being covered by the exclusion in schedule entry C-I- 24 ?" 2. The present dispute revolves around the interpretation of Schedule Entry C-I-24 of the BST Act, which related to "medicines", and was in force from 01-05-1993 to 30-09- 1995. To understand the controversy it would be necessary to set out the necessary Entries and the amendments thereto. The Schedule Entry relating to "medi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Applicant was the original Appellant in Appeal No.18 of 1995 and Appeal No.4 of 1999. It is engaged in the manufacture of drugs and medicines with its factory being in Ankleshwar, Gujarat and its office in Mumbai. For manufacturing of drugs and medicines, the Applicant has been granted the necessary licence under the Drugs and Cosmetics Act, 1940. Amongst other products, the Applicant also manufactures two products called 'THERMOSEAL" and "RA THERMOSEAL" (the said products). (b) In September 1993, the Applicant, under section 52 of the BST Act, applied to the Commissioner of Sales Tax, Maharashtra State, Mumbai, seeking determination as regards the classification of the said products sold under its invoice dated 13th September 1993, and the rate at which sales tax was payable in respect of the said products. It was claimed by the Applicant that both the aforesaid products were "medicines" covered by the then existing Schedule Entry C-I-24 liable to tax at 4%, since the said products were specially formulated to treat "mild to moderate" sensitivity and "severe" hypersensitivity of the teeth. (c) The Commissioner however rejected the Applicant's contention, and by his or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Entry C-I-24 and therefore fell under Schedule Entry C-II-36 (before amendment) relating to "toothpaste". Accordingly, Appeal No.18 of 1995 was dismissed by the MSTT. (h) So far as the second invoice dated 15th July 1996 was concerned, the MSTT held that by virtue of the amendments to the BST Act, the "medicines" Entry viz. C-I-24 was substantially amended and renumbered as Entry C-II-37, which inter alia deleted the specific exclusions that were existing in Entry CI- 24. It therefore held that in the absence of such specific exclusions, the said products under the second invoice dated 15th July, 1996 would be classified as "medicines" in Entry C-II-37 (after amendment) and not as "toothpastes" under Schedule Entry C-II-32 (after amendment). Accordingly, the MSTT allowed Appeal No.4 of 1999 filed by the Applicant and set aside the determination order dated 30th October 1998 passed by the Commissioner. (i) Being aggrieved by the dismissal of it's Appeal No.18 of 1995, the Applicant preferred Reference Application No.47 of 2001 before the MSTT and prayed that the questions of law set out earlier in this judgement, be referred to this court under section 61 of the BST Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. He submitted that whilst predominantly acting as a "medicine", RA THERMOSEAL incidentally cleans the teeth and therefore there is no need to use a regular toothpaste. He submitted that the RA THERMOSEAL toothpaste is to be used for a limited period and then has to be replaced by THERMOSEAL toothpaste which is the other product manufactured by the Applicants. This product also contains a substance "Strantim Chloride Hexahydrate 10%" due to which it has the effect of treating teeth having mild to moderate sensitivity. He submitted that a person having teeth which are prone to sensitivity, are advised to use THERMOSEAL on a permanent basis, since it's stoppage is most likely to lead to recurrence of teeth sensitivity. He therefore submitted that the said products are "medicines" for treating teeth sensitivity though incidentally they also help in cleaning the teeth. In view of this, Mr Surte contended that the said products of the Applicant did not fall within the exclusion clause of C-I-24 viz. products capable of being used as toothpaste as they were primarily and mainly used for treating teeth sensitivity and not for cleaning teeth. He submitted that the said products incide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtain maximum relief, it is important to follow the instructions of your dentist and do as advised above. If you brush irregularly or stop brushing with Thermoseal once pain is reduced, sensitivity could return. Thermoseal has been specially formulated with a pleasant fresh taste and low abrasive formula which cleans your teeth and leaves your mouth tingling fresh. Hence there is no need to use a regular toothpaste. Do not mix Thermoseal with any other toothpaste." "Regular daily brushing with Thermoseal will keep your teeth sparkling clean, while building increasing protection against painful sensitivity to cold, heat, acids, sweets or contacts" (emphasis supplied) 10. From the said advertising material, it is clear that the Applicant itself claims that the said products have been specifically formulated with a pleasant fresh taste and low abrasive formula for cleaning the teeth and leaving the mouth tingling fresh. Even the said products are marketed as "No.1 toothpaste for sensitive teeth". To our mind therefore, it is clear that though the said products of the Applicant are "medicines", that would fall under Schedule Entry C-I-24, the same would be excluded from the said En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fruits or vegetables for the evening meal bring home salted peanuts, cashew or nuts of any sort? The answer is obviously 'no'." Applying the test, the Court held that the words "fruit" and "vegetable" are not defined in the Act or any of the Acts in pari materia. They are ordinary words in everyday use and are therefore, to be construed according to their popular sense. 22. In Ramavatar Budhaiprasad v. STO [AIR 1961 SC 1325 : (1962) 1 SCR 279] the issue before this Court was whether betel leaves could be considered as "vegetables" in the Schedule of the C.P. & Berar Sales Tax Act, 1947 for availing the benefit of exemption. While construing the import of the word "vegetables" and holding that betel leaves could not be held to be "vegetables", the Court observed thus: (AIR p. 1326, para 4) "4. ... But this word must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. It has not been defined in the Act and being a word of everyday use it must be construed in its popular sense meaning 'that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it'." (emphasis supp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
