Statutory definition with notified extension governed taxability of fermented medicinal preparations as foreign liquor.

A taxing entry that adopts a statutory definition together with its proviso is governed by the definition as extended by any valid notification issued under that proviso. On that basis, liquid medicinal preparations containing self-generated alcohol produced by fermentation were treated as foreign liquor for purposes of the Bombay Sales Tax Ordinance. The schedule did not create an independent meaning of foreign liquor; it incorporated the meaning from the prohibition statute and the notified extension, bringing the goods within the taxable description.

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Issues: Whether medical preparations containing self-generated alcohol prepared by a process of fermentation were liable to special tax as foreign liquor under the Bombay Sales Tax Ordinance by reason of the definition of foreign liquor in the Bombay Prohibition Act read with the notification issued under the proviso to that definition.

Analysis: The liability under the sales tax law turned on the statutory definition of foreign liquor incorporated from the Bombay Prohibition Act and read with the proviso empowering the State Government to notify specified descriptions of country liquor as foreign liquor. The Schedule in the sales tax law did not create an independent meaning of foreign liquor, but adopted the meaning supplied by the prohibition statute together with the notification validly issued under the proviso. Once the notification declared liquid medicinal preparations containing self-generated alcohol prepared by a process of fermentation to be foreign liquor for the purposes of the Act, those goods fell within the taxable description.

Conclusion: The sales of medical preparations containing self-generated alcohol prepared by a process of fermentation were rightly subjected to tax as sales of foreign liquor, and the answer was in the affirmative.

Final Conclusion: The reference was answered in favour of the Revenue, and the taxable character of the goods was upheld on the basis of the statutory definition as extended by the notification.

Ratio Decidendi: Where a taxing entry adopts a statutory definition read with its proviso, the notified deeming extension of that definition governs the scope of the taxable commodity.

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