Broad construction of medicinal mixtures or compounds brings unani preparations within sales tax item 95, despite no Drugs Act licence.

Unani country drugs were treated as falling within item 95 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, because the item covered not only drugs and patent or proprietary medicines, but also medicinal mixtures or compounds. The broader phrase was read independently of the opening reference to drugs defined under the Drugs and Cosmetics Act, 1940, so absence of a licence under that Act did not control sales tax classification. On that construction, unani preparations remained assessable under item 95 and the multi-point levy argument failed.

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Issues: Whether unani country drugs prepared and sold by the assessees fell within item 95 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, and whether the absence of a licence under the Drugs and Cosmetics Act, 1940, excluded such goods from that item and attracted only multi-point levy.

Analysis: Item 95 covered not only drugs, patent or proprietary medicines as defined in section 3 of the Drugs and Cosmetics Act, 1940, but also medicinal mixtures or compounds, subject to the stated exclusions. The expression "medicinal mixtures or compounds" was construed broadly and was not controlled by the opening reference to drugs as defined in the Drugs and Cosmetics Act, 1940. The requirement of holding a licence under the Drugs and Cosmetics Act, 1940, was held to be irrelevant for determining sales tax liability under the Schedule item. On that construction, country drugs manufactured in the unani system were treated as falling within item 95.

Conclusion: The unani preparations were assessable under item 95 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, and the challenge based on absence of a licence under the Drugs and Cosmetics Act, 1940, failed. The tax revisions were therefore liable to be dismissed, resulting in a decision against the assessee.

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