Sales tax classification of saffron turns on primary commercial use, not occasional medicinal use, and exemption was denied.

Saffron was held not to qualify as an ayurvedic medicine in natural form under the exemption entry, because the article itself had to be a medicine and not merely a substance with medicinal properties; its occasional use in ayurvedic preparations did not alter its character. It was also held classifiable under the entry for culinary and flavouring essence, as its primary commercial use was in cooking for colouring and flavouring, and no other applicable entry was established. The reference was answered against the assessee and in favour of the Revenue, confirming taxable treatment outside the claimed exemption.

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Issues: (i) Whether saffron was an ayurvedic medicine in natural form covered by entry 214 of the exemption notification issued under section 41 of the Bombay Sales Tax Act, 1959; (ii) whether saffron, after exclusion from entry C-II-13, was classifiable under entry C-II-78 as culinary and flavouring essence.

Issue (i): Whether saffron was an ayurvedic medicine in natural form covered by entry 214 of the exemption notification issued under section 41 of the Bombay Sales Tax Act, 1959.

Analysis: Entry 214 granted concessional treatment to ayurvedic and unani medicines in prepared form or in natural or herbal form. The decisive requirement was that the item itself must be a medicine and not merely a substance having medicinal properties. Saffron was mainly sold as a commodity for cooking and flavouring, and its occasional use in ayurvedic preparations did not convert it into an ayurvedic medicine. The Tribunal's conclusion was held to be unsupported by the record.

Conclusion: Saffron was not an ayurvedic medicine in natural form covered by entry 214.

Issue (ii): Whether saffron, after exclusion from entry C-II-13, was classifiable under entry C-II-78 as culinary and flavouring essence.

Analysis: Classification was determined by the primary use of the article. The material on record showed that saffron was predominantly used in cooking as a colouring and flavouring material. Once it was excluded from the specific spice entry, its commercial identity and use brought it within culinary and flavouring essence. The assessee did not establish any other applicable entry.

Conclusion: Saffron was classifiable under entry C-II-78.

Final Conclusion: The reference was answered against the assessee and in favour of the Revenue, with saffron held outside the exemption for ayurvedic medicine and within the taxable entry for culinary and flavouring essence.

Ratio Decidendi: For sales tax classification, an item falls within an exemption for medicines only if the article itself is a medicine, and the primary commercial use of the goods governs classification where no contrary trade parlance or statutory basis is shown.

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