Market representation controls tax classification of a branded soap, not manufacturing nature or licence status.

Sales tax classification depends on how a commodity is represented and sold in the market, not merely on its manufacture or the licence held by the manufacturer. A product marketed as "Jeeva soap" was treated as soap rather than an ayurvedic medicine or pharmaceutical preparation because it was sold to customers as a soap and not held out as a medicinal product. On that basis, it fell within the entry for soap other than washing soap and attracted the higher tax rate, while the lower rate for pharmaceutical or ayurvedic products was unavailable.

---

---

Issues: Whether the product marketed and sold as "Jeeva soap" was liable to trade tax as soap other than washing soap, or whether it could be treated as an ayurvedic medicine or pharmaceutical preparation attracting the lower rate of tax.

Analysis: The product was sold to customers as a soap bearing the brand name "Jeeva". The decisive consideration was how the commodity was held out in the market and sold to buyers, not merely the nature of manufacture or the fact that a drug licence had been obtained. There was no representation to buyers that the product was being sold as an ayurvedic medicine or only as a pharmaceutical preparation. On the contrary, it was sold as a soap, and there was no contention that it was not a washing soap. In that situation, the product fell within the entry covering soap other than washing soap and was taxable at the higher rate.

Conclusion: The product was correctly classified as soap other than washing soap and was not entitled to the lower rate applicable to pharmaceutical preparations or ayurvedic medicine.

Final Conclusion: The revisions were rejected and the tax assessment at 12 per cent was upheld.

Ratio Decidendi: For sales tax classification, the liability is determined by the manner in which the commodity is represented and sold in the market, and not by the nature of its manufacture or the licence held by the manufacturer.

---