Medicine exemption denied for benzene hexachloride, since an insecticide used for malaria control is not a medicine.

Benzene hexachloride 50 per cent W.D.P. was held not to be a medicine for exemption under rule 24 of the M.P. General Sales Tax Rules, 1959. The court applied the common and commercial meaning of "medicine" as a substance taken internally or applied externally for treating human or animal disease, and distinguished the product as an insecticide used for spraying marshy, waterlogged areas to destroy malaria-carrying germs. Reference to a malaria eradication certificate did not change its character or justify the exemption. The result was that the deduction for sales of medicines to specified bodies was unavailable and the issue was decided for the Revenue.

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Issues: Whether benzene hexachloride 50 per cent W.D.P. is a medicine for the purpose of exemption under rule 24 of the M.P. General Sales Tax Rules, 1959.

Analysis: The relevant statutory scheme taxed goods under Schedule II of the M.P. General Sales Tax Act, 1958, and allowed deduction only for sales of medicines to specified Government or public bodies on certification of bona fide use. The article in question was used for spraying marshy and waterlogged places to destroy malaria-carrying germs, and it was not consumed internally or applied externally on human beings or animals for treatment, mitigation, or prevention of disease. The expression 'medicine' was not defined in the Act or the Rules, so it had to be understood in its common and commercial meaning, namely a substance taken internally or applied externally for treating human or animal disease. The definitions in other enactments, including the Drugs and Cosmetics Act, 1940, the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, and the Insecticides Act, 1968, supported the distinction between medicine and insecticide. A certificate showing purchase for malaria eradication did not convert an insecticide into medicine, and the Board of Revenue's reliance on that certificate was misplaced.

Conclusion: Benzene hexachloride 50 per cent W.D.P. is not a medicine for purposes of rule 24, and the exemption was not available. The question was answered in the negative, in favour of the Revenue and against the assessee.

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