Commodity classification turns on essential ingredients and dominant character; a food-based powder was not treated as a medicine.

A sales tax notification describing a commodity by essential ingredients and compositional conditions must be applied on the product's true composition and dominant character. Protinules (powder) satisfied the notification for powdered or condensed milk because skimmed milk powder and casein formed 55.79% by weight and the remaining ingredients did not change its essential character. It did not satisfy the notification for food drink powders because cocoa, chocolate and malt were not shown as major ingredients. It was also not a drug or patent or proprietary medicine, as it was predominantly a food item and not shown to be treated in common parlance as medicine. The contrary assessments were set aside.

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Issues: (i) Whether Protinules (powder) was covered by Notification No. 886-F.T. dated 1 May 1955 as powdered or condensed milk under section 25 of the West Bengal Sales Tax Act, 1954; (ii) whether it was covered by Notification No. 790-F.T. dated 2 April 1957 read with Notification No. 1022-F.T. dated 29 March 1984 as powders for food drinks having cocoa or chocolate and malt as major ingredients; (iii) whether it was a drug or patent or proprietary medicine within Notification No. 1658-F.T. dated 1 August 1956 read with section 3(b) and section 3(h) of the Drugs and Cosmetics Act, 1940; and (iv) whether it was exigible to tax under the Bengal Finance (Sales Tax) Act, 1941.

Issue (i): Whether Protinules (powder) was covered by Notification No. 886-F.T. dated 1 May 1955 as powdered or condensed milk under section 25 of the West Bengal Sales Tax Act, 1954.

Analysis: The product was found to be a mixture in which skimmed milk powder and casein together constituted 55.79 per cent by weight, exceeding the statutory threshold in the proviso to the notification. The remaining ingredients, including cane sugar, vitamins, inositol and flavouring, did not displace the essential character of the product as powdered or condensed milk mixed with other substances. On the facts admitted and proved, the requirements of the notification were satisfied.

Conclusion: Protinules (powder) fell within Notification No. 886-F.T. dated 1 May 1955 and was taxable as powdered or condensed milk.

Issue (ii): Whether Protinules (powder) was covered by Notification No. 790-F.T. dated 2 April 1957 read with Notification No. 1022-F.T. dated 29 March 1984 as powders for food drinks having cocoa or chocolate and malt as major ingredients.

Analysis: The notification required a powder for food drinks with cocoa or chocolate and malt as major ingredients. The product was found to contain milk protein and carbohydrate as the major ingredients, while neither cocoa nor chocolate nor malt was shown to be a major ingredient. The label and composition of the product did not satisfy the essential ingredients of the notification.

Conclusion: Protinules (powder) was not covered by Notification No. 790-F.T. dated 2 April 1957 read with Notification No. 1022-F.T. dated 29 March 1984.

Issue (iii): Whether Protinules (powder) was a drug or patent or proprietary medicine within Notification No. 1658-F.T. dated 1 August 1956 read with section 3(b) and section 3(h) of the Drugs and Cosmetics Act, 1940.

Analysis: The product was held to be predominantly a food item and a nourishing drink, not a medicine directly intended to diagnose, treat, mitigate or prevent disease in the statutory sense. The materials relied on by the applicant, including medical opinions, catalogues and publications, did not establish that the product was treated in common parlance as a drug or medicine. The absence of a manufacturing or sale licence under the Drugs and Cosmetics Act, 1940 also supported the conclusion that the product was not being dealt with as a drug or patent or proprietary medicine.

Conclusion: Protinules (powder) was neither a drug nor a patent or proprietary medicine for the purpose of Notification No. 1658-F.T. dated 1 August 1956.

Issue (iv): Whether Protinules (powder) was exigible to tax under the Bengal Finance (Sales Tax) Act, 1941.

Analysis: Since the product was held to fall under Notification No. 886-F.T. dated 1 May 1955, it ceased to be governed by the 1941 Act for the relevant commodity classification. The contrary assessments based on the 1941 Act were therefore unsustainable.

Conclusion: Protinules (powder) was not exigible to tax under the Bengal Finance (Sales Tax) Act, 1941.

Final Conclusion: The commodity was classified as notified powdered or condensed milk under the 1954 Act, not as a drug, patent or proprietary medicine, and the assessments and demand founded on the contrary view were set aside.

Ratio Decidendi: Where a sales tax notification describes a commodity by essential ingredients and compositional conditions, classification must follow the statutory notification on the product's true composition and dominant character, and a predominantly food-based preparation will not be treated as a drug merely because it has nutritive or medicinal associations.

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