Classification of sugar of milk as a homoeopathic component brought it within the beneficial sales tax entry.

Sugar of milk is treated as a component of homoeopathic medicine, and therefore as a drug for the sales tax entry, where its composition, commercial use, and recognition under the Drugs and Cosmetics Act, 1940 show that it functions as an ingredient in triturations and as a vehicle in homoeopathic preparation. The tribunal note states that, on the evidence and the Government laboratory report, the product fell within serial No. 24A of Schedule IV of the West Bengal Sales Tax Act, 1994 and not under the general charging provision. The assessments, appellate order, and revisional order were set aside on the classification issue.

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Issues: Whether sugar of milk is a bulk drug or component of a homoeopathic medicine so as to fall within serial No. 24A of Schedule IV of the West Bengal Sales Tax Act, 1994 and be taxable at the lower rate, rather than be taxed under the general charging provision.

Analysis: The goods were examined in the context of their composition, commercial use, and treatment under the Drugs and Cosmetics Act, 1940. The material on record showed that sugar of milk was not only used as a vehicle in homoeopathic preparation but also as an ingredient in triturations and as a substance intended for use as a component of a drug. The Government laboratory report supported the view that the product conformed to the prescribed composition and could be used as homoeopathic medicine. In interpreting a taxing entry, the relevant use, technical character, and statutory recognition under allied legislation were treated as important indicators.

Conclusion: Sugar of milk was held to be a component of homoeopathic medicine and therefore a drug for the purpose of the sales tax entry, bringing it within serial No. 24A of Schedule IV of the West Bengal Sales Tax Act, 1994.

Final Conclusion: The assessments and the appellate and revisional orders were set aside, and the petitioner obtained relief on the classification issue.

Ratio Decidendi: Where a product is statutorily and technically recognised as a component of homoeopathic preparation and the evidence shows it is used in the manufacture of such medicine, it may be classified within the beneficial taxing entry for bulk drugs rather than under the general rate provision.

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