1985 (12) TMI 366 - HC - VAT and Sales Tax

Court affirms Odomos as 'medicine'; dismisses Sales Tax revision.

The Court upheld the Sales Tribunal's decision classifying 'Odomos' mosquito repellent cream as a 'medicine and pharmaceutical preparation' under a ... Classification of goods for sales tax - medicine and pharmaceutical preparation including insecticides and pesticides - common parlance interpretation of fiscal entries - preventive medicine - control under the Drug and Cosmetics Act as indicium of classificationMedicine and pharmaceutical preparation including insecticides and pesticides - common parlance interpretation of fiscal entries - preventive medicine - classification of goods for sales tax - control under the Drug and Cosmetics Act as indicium of classification - Odomos (mosquito repellent cream) is covered under the entry 'medicine and pharmaceutical preparation including insecticides and pesticides' in Notification dated 7-9-1981 and is not an unclassified item taxable at the higher rate. - HELD THAT: - The Tribunal's conclusion that Odomos falls within the notified entry is affirmed. The Court applied the principle that entries in a sales tax statute must be construed in common parlance rather than by confined technical or purely dictionary meanings, a principle the Tribunal invoked with reference to the decision in M/s. Ram Autar Budhai Prasad v. Assistant Sales Tax Officer . The decisive consideration is the ordinary use of the commodity: Odomos is applied to human skin to repel mosquitoes and thereby prevent insect-borne infections; this preventive role brings it within the concept of a 'preventive medicine.' Further support for classification arises from the fact that manufacture of the product is regulated under the Drug and Cosmetics Act, 1940, which the Court regarded as an indicium that the commodity is used like a medicine. The availability of Odomos in general stores, as opposed to exclusive sale at chemist shops, does not alter its character; retail availability is not determinative of its nature for tax classification. Applying these principles, the Tribunal was justified in treating Odomos as covered by the notification rather than as an unclassified item. [Paras 4, 5]Revision by the Commissioner is rejected and the Tribunal's allowance of the assessee's appeal is upheld.Final Conclusion: The High Court dismisses the revision and upholds the Sales Tribunal's finding that Odomos is covered by the notified entry as a (preventive) medicinal/pharmaceutical preparation; no order as to costs. Issues involved: Interpretation of the term 'medicine and pharmaceutical preparation' under Notification No. ST-1I-5785/X-10 (1) U. P. S. T. Act-i5/Order-81.Summary:The Commissioner of Sales Tax, U. P., filed a revision under Section 11 (1) of the U. P. Sales Tax Act against the Sales Tribunal's judgment in favor of the respondent-assessee, who sells 'Odomos' mosquitoes repellent cream. The Commissioner opined that Odomos is an unclassified item taxable at 8%, while the Tribunal held that it falls under the category of 'medicine and pharmaceutical preparation' as per a specific notification. The Tribunal considered various meanings of the term 'medicine' and noted that Odomos is used as a preventive measure against mosquito bites, akin to a medicine. The Tribunal also highlighted that Odomos is regulated under the Drug and Cosmetics Act, supporting its classification as a medicine.The department argued that Odomos is not exclusively sold in chemist shops, but also in general merchandise stores. However, the Court emphasized that the common usage and purpose of a product should determine its classification. Referring to established legal principles, the Court upheld the Tribunal's decision, stating that Odomos, being commonly understood and used as a medicine, falls under the notification's purview. Therefore, the revision was dismissed, and no costs were awarded.Separate Judgment:No separate judgment was delivered by the judges in this case.