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TMI Blog2017 (1) TMI 1834X X X X Extracts X X X X X X X X Extracts X X X X ..... 144 and the tax was imposed at 20%. It is apparent from the Schedule that the rate of tax is not fixed on the basis of HSN Code whereas rate of tax has been specified based on specific entry made in the Schedule. The petitioner's product apparently is a medicated talcum powder and it is so found by Division Bench of this Court in S.T. Revn. Nos. 164/2007 and 172/2008 [ 2008 (9) TMI 845 - KERALA HIGH COURT ]. It is settled law that a legislative provision cannot be struck down by this Court lightly. Fiscal measures adopted by the Government in a taxing statute cannot be termed as arbitrary, however, harsh it may be. Despite contending that the provision is unconstitutional, no facts are placed to arrive at such a finding. This Court will not be justified in interfering with the Entry by which medicated talcum powder has been included in the Schedule to the KGST Act by which tax is levied at 20% - there are no reason to grant the reliefs prayed for -- petition dismissed. - A.M. Shaffique, J. For the Appellant : Joseph Jerard Samson Rodrigues and Rovin Rodrigues. For the Respondents : P.K. Shamsuddin, Government Pleader. JUDGMENT A.M. SHAFFIQUE, J. 1. Petitioner, a dealer under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so. Petitioner states that from assessment years 1992-93 to 1998-99, assessments were completed treating the prickly heat powder as drug. In regard to assessment year 2000-2001, the assessment was completed classifying Nycil Prickly Heat powder as a medicated talcum powder falling under Sl. No. 144 of 1st Schedule to the KGST Act which was identical to the previous Sl. No. 127 of 1st Schedule. In regard to assessment year 1999-2000, assessment was completed treating Nycil as a drug or medicine and thus levying sales tax only at 8%. However notice had been issued under Section 34 proposing to assess the turnover as medicated talcum powder subjecting the same to tax at 20%. Though the petitioner filed objections, as per order dated 16/2/2006, it was held that prickly heat powder was taxable under Sl. No. 127 of First Schedule. Petitioner preferred an appeal with respect to assessment year 1999-2000. However, the appeal came to be dismissed as per Ext. P3 order dated 14/11/2006. Petitioner filed revision as ST Revision No. 164/2007 before this Court. In respect of assessment year 2000-2001, petitioner was taxed at 20% at Sl. No. 144. He preferred an appeal which was dismissed as per o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is submitted that the decision of the High Court in ST. Rev. Nos. 164/2007 and 172/2008 has virtually decided the issue and there is no reason why the matter should be reagitated in a separate writ petition. It is further submitted that the Entry 127 of First Schedule clearly indicates that it is an inclusive definition and therefore there cannot be any dispute regarding the fact that the product of the petitioner is liable to be taxed at 20%. 6. Heard the learned counsel for the petitioner and the learned Government Pleader appearing on behalf of the State. 7. Learned counsel for the petitioner placed reliance upon the following judgments:- (i) Muller and Phipps (India) Ltd. v. Collector of Central Excise, Bombay-I [(2004) 4 SCC 787] In that case, the Apex Court was considering a challenge to an order passed by the Customs, Excise and Gold (Control) Appellate Tribunal wherein the question raised was whether Johnson's prickly heat powder and Phipps Processed talc are patent or proprietary medicines classifiable for the purpose of excise duty under erstwhile tariff item 14-E (prior to 1/3/1986) and the heading 30.03 (after 1/3/1986) as claimed by the appellants or whether th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the earlier occasions by the department and the product having been utilised with reference to the commercial parlance and understanding, that it had been treated as a drug it would not cease to be one notwithstanding the fact that new tariff act has come into force. What is to be seen in such cases is when in the common parlance, for purpose of the Drug Act, for purpose of Sales Tax Act and in various findings recorded on earlier occasions by the department itself having been noticed, the conclusion is inevitable that the products in question must be treated as medicinal preparations. 13. Therefore, we have no hesitation in reversing the view of the Tribunal and restore that of the Collector. (ii) In Commissioner of Central Excise v. Ciens Laboratories (2013 (3) KLT S.N. 111), the Apex Court considered the question whether a cream used for treating dry skin condition render the product a medicament and not a cosmetic. This was also considered in the light of the heading under the HSN as to whether it is under 30.03 or 30.04 After considering the relevant statutory issues, it was held at paras 19, 20 and 21 as under; 19. Thus, the following guiding principles emerge from the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to the pharmaceutical constituents present in the cream 'Moisturex' and its use for the cure of certain skin diseases, have rightly held that the same is a medicament liable to be classified under the Heading 30.03 (medicament). Thus, there is no merit in these appeals. (iii) In Manisha Pharma Plasto Pvt. Ltd. v. Union of India [1999 (112) E.L.T. 22 (Delhi)], the Delhi High Court was considering the classification of Nycil Prickly heat powder as to whether it was coming under heading 30.03 or 33.04. It was held at paras17 to 20 as under; 17. We have carefully considered the entire matter. In our view firstly, the product in question satisfies the common parlance or popular meaning test, i.e., popular meaning attached to a product by a consumer. The product is not used by consumers as a daily-use talcum powder. It is a product normally used for the specific purpose of treating prickly heat and as soon as the ailment is treated, the use of the product is discontinued. To illustrate the point further we have the analogy of Boroline cream as in the Calcutta High Court judgment in Union of India Vs. G.D. Pharmaceuticals Limited (supra). The SLP against this judgment was dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned counsel for the applicant has pointed out a typographical error in the last para of the judgment. We agree with the learned counsel for the applicant that in the third line of the last para of the judgment the Tariff Entry should read as 30.03 and not 33.03 as it presently occurs there. The application is accordingly allowed. The correction is being made in the original judgment also under our initials. 8. There cannot be any dispute about the law laid down by the Apex Court as well the Delhi High Court as far as the classification of Nycil prickly heat powder in so far as the respective HSN Code is concerned. But the question in this case is whether the statute which includes the medicated talcum powder as one of the categories for the purpose of taxation can be struck off as ultra vires on the ground of arbitrariness or illegality. 9. Until 01/04/1992, as per Sl. No. 75 of 1st Schedule, other medicines and drugs including ayurvedic, homeopathic, sidha and unani preparations were taxed at the rate of 6%. Talcum powder and other perfumeries and cosmetics not falling under any other item was taxed at 10%. From 01/4/92 to 31/12/1999, under Sl. No. 79, medicines and drugs includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Powder' is not an ordinary talcum powder as understood in common or commercial parlance, but has a medicinal value and is used for treatment of prickly heat and other skin ailments. But then, under which entry we should classify the commodity in question. In our view, if not for the inclusive definition under entry 127 of the first schedule to the KGST Act, we would not had any hesitation in classifying the commodity in question as a medicine. In our view, the legislature consciously immediately after the expression talcum powder, by employing the expression 'including' has thought it fit to include medicated talcum powder under Entry 127 of first schedule to the Act. In view of this inclusive definition, though the nycil powder has all the qualities and ingredients of medicines and since the same is basically a talcum powder which has preventive and curative power, the same requires to be brought under the special entry rather than the general entry. 39. The Apex Court in Ponds India Ltd.'s case, 15 VST 256, has stated, that, it is true that the court must bear in mind the precise purpose for which the statute has been enacted, namely herein for the purpose of col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of special entry as the same is to prevail over the general entry. Therefore, in our considered opinion, though the Nycil Prickly Heat Powder is used for the care of the skin and not cure of the skin and though it contains a small quantity of Chlorphenesin, which has curative effect; in view of the specific entry, it has to be classified only under Entry 127 of First Schedule to the KGST Act and not under Entry 79 of the Act which speaks of Medicines and drugs. Then the only question is whether the Entry in the Statute is unconstitutional in any manner. It is settled law that a legislative provision cannot be struck down by this Court lightly. Fiscal measures adopted by the Government in a taxing statute cannot be termed as arbitrary, however, harsh it may be. Despite contending that the provision is unconstitutional, no facts are placed to arrive at such a finding. 10. In the result, I do not think that this Court will be justified in interfering with the Entry by which medicated talcum powder has been included in the Schedule to the KGST Act by which tax is levied at 20%. Hence, I do not find any reason to grant the reliefs prayed for. Writ petition is dismissed. - - T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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