Court upholds tax on thulasi leaves for cough syrup, not qualifying as vegetables

The High Court affirmed the Tribunal's decision to levy tax on the petitioner's purchase of thulasi leaves for manufacturing cough syrup. The court held that thulasi leaves do not qualify as vegetables under the relevant tax exemption entry, as they are primarily used in rituals and not for human consumption like traditional cooking vegetables. Consequently, the petitioner was not entitled to exemption, and the sales tax revision was dismissed.

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Issues:
Whether the Tribunal is justified in confirming the levy of tax under section 5A on the purchase turnover of thulasi leaves by the petitioner for the manufacture of cough syrup.

Analysis:
The petitioner, an ayurveda doctor engaged in the manufacture of ayurvedic drug preparations, including cough syrup, purchases thulasi leaves from unregistered dealers. The department contends that the petitioner is liable to pay tax under section 5A on the purchase of thulasi leaves, while the petitioner argues for exemption under entry 59 of the Third Schedule to the Kerala General Sales Tax Act, 1963. The Tribunal upheld the tax levy, stating that since the petitioner's product is a manufactured one, tax is applicable on the raw material. The High Court concurred with the Tribunal, emphasizing that thulasi leaves do not qualify as vegetables under entry 59, which includes items like yam, potatoes, lime, sabola, and tomatoes typically used in cooking. Thulasi leaves, being an ayurvedic herb primarily used in temples for rituals, do not fall under the category of vegetable leaves used for cooking, such as spinach or cabbage. Therefore, the petitioner is not entitled to exemption on thulasi leaves as they are not considered vegetables for human consumption. The sales tax revision was dismissed for lack of merit based on this analysis.

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