Ayurvedic classification of medicaments prevailed over residuary entry where drug licence and literature supported medicinal character.

Chlormint with herbasol and Happydent White were treated as ayurvedic medicines under Item 41 of Part A of Schedule II to the U.P. VAT Act rather than unclassified goods under the residuary Schedule V entry. The court applied the rule that, when a specific entry and a residuary entry are in dispute, the assessee must first show coverage under the specific entry and the burden then shifts to the revenue to prove exclusion. Valid drug licensing, supporting literature, and prior recognition of the products as medicines were sufficient, while sale across the counter, absence of prescription, and common parlance did not displace their medicinal character on these facts.

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Issues: Whether chlormint with herbasol and happydent white were classifiable as ayurvedic medicines under Item 41 of Part A of Schedule II to the U.P. VAT Act or as unclassified goods under the residuary entry in Schedule V.

Analysis: The products were manufactured under a valid drug licence and the assessee relied on authoritative literature and prior judicial recognition of the same products as ayurvedic medicines. The revenue led no contra evidence to displace that material. The Court held that, in a dispute between a specific taxable entry and a residuary entry, the initial burden lies on the assessee to show coverage under the specific entry, after which the burden shifts to the revenue to prove exclusion. The revenue's reliance on sale across the counter, absence of prescription, and common parlance was rejected on the facts, since such circumstances do not by themselves negate medicinal character where the product is treated as a medicament by the drug authorities and is supported by relevant literature.

Conclusion: The products were held to fall within Item 41 as ayurvedic medicines and not within the residuary entry; the revision failed.

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