Commercial parlance test governs sales tax classification of medicated products over cosmetic labels and counter sale.

Classification of products under sales tax entries depends on commercial parlance, composition, intended use, product literature, and licensing status, not on dictionary meaning alone. On the record, Keo Karpin Hair Vitalizer and Keo Karpin Baby Oil were manufactured under permission issued under the Drugs and Cosmetics Act, marketed as medicinal preparations, and described by their labels and composition as having therapeutic and preventive use. The revenue did not adduce material to show that the market understood them as cosmetics, and the fact that they were sold over the counter did not exclude medicament status. They were therefore classifiable as medicines, drugs, or pharmaceutical preparations, not as cosmetics or perfumery.

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Issues: Whether the products "Keo Karpin Hair Vitalizer" and "Keo Karpin Baby Oil" were classifiable as medicines or medicinal preparations under Entry 60 of the notification issued under Section 5 of the Rajasthan Sales Tax Act, 1954, or as cosmetics/perfumery under Entry 69.

Analysis: Classification under a taxing entry depends on the nature of the article, its ingredients, the uses to which it is put, its market understanding, the product literature, and whether it is manufactured and marketed under the relevant drug licence. The commercial parlance test, rather than a dictionary meaning, governs such classification. The record showed that both products were manufactured with permission under the Drugs and Cosmetics Act, 1940, were marketed as medicinal preparations, and their compositions and labels indicated therapeutic and preventive use. The revenue failed to produce material showing that the products were understood in the market as cosmetics, and the burden to establish the applicable entry lay on the revenue. The mere fact that the products were sold across the counter did not exclude them from being medicaments.

Conclusion: The products were correctly held to fall under Entry 60 as medicines, drugs, or pharmaceutical preparations and not under Entry 69 as cosmetics or perfumery.

Ratio Decidendi: For sales tax classification, the decisive test is commercial parlance read with the product's composition, intended use, market perception, and licensing status; where these show medicinal character, the goods are classifiable as medicaments notwithstanding counter sale or cosmetic connotation in name or packaging.

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