Medicines classification under VAT schedule upheld for Chlormint and Happydent, with unclassified goods treatment rejected.

Chlormint and Happydent were treated as medicines under Entry-88 of the IV-Schedule of the A.P. VAT Act, 2005 because the products had already been classified that way in the assessee's own case, supported by the drug licence position and consistent High Court authority on similar facts. The Revenue's attempt to classify them as unclassified goods under the V-Schedule was rejected, and the view that each assessment year is independent did not justify departure from the settled classification in light of the Full Bench position.

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Issues: Whether Chlormint and Happydent manufactured and sold by the assessee were classifiable under Entry-88 of the IV-Schedule of the A.P. VAT Act, 2005, or as unclassified goods under the V-Schedule; and whether the assessment orders could be sustained in view of prior tribunal and High Court decisions treating the products as medicines.

Analysis: The goods had already been considered in the assessee's own case by the Sales Tax Appellate Tribunal, which, after examining the entries in the VAT schedule and the drug licence under the Drugs and Cosmetics Act, 1940, held that the products fell within the medicines entry. That view was consistent with the decisions of the Uttarakhand High Court and the Allahabad High Court on substantially similar facts, and the Revenue's challenge before the Supreme Court had also failed. The Court found no justiciable basis to depart from that settled position. The justification that each assessment year stands independently and that there is no res judicata in tax matters was rejected in light of the Full Bench decision overruling the earlier view relied on by the Assessing Authority.

Conclusion: Chlormint and Happydent were to be classified under Entry-88 of the IV-Schedule of the A.P. VAT Act, 2005 as medicines, and the assessment orders treating them as goods under the V-Schedule were unsustainable.

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