Common parlance classification and revenue burden control entry tax treatment of medicaments, starch, and chemical goods.

Classification under a fiscal entry depends on common parlance and the product's primary use, with the revenue bearing the burden of proving taxability under the claimed entry. Applying that approach, Mediker was treated as an anti-lice medicament manufactured under a drug licence and used for therapeutic and prophylactic treatment, so it was not a shampoo or cosmetic and was not liable to entry tax. Revive instant starch was found to be tapioca-based starch used for washing clothes, not a chemical in common parlance, and no material supported classification under the chemicals and acids entry. On that basis, entry tax on both products was unsustainable.

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Issues: (i) Whether Mediker was classifiable as a hair shampoo under the entry for shampoos and cosmetics, or was a medicinal product outside the charging entries of the Madhya Pradesh Entry Tax Act, 1976. (ii) Whether Revive instant starch was a chemical falling within the entry for chemicals and acids in Schedule II of the Madhya Pradesh Entry Tax Act, 1976.

Issue (i): Whether Mediker was classifiable as a hair shampoo under the entry for shampoos and cosmetics, or was a medicinal product outside the charging entries of the Madhya Pradesh Entry Tax Act, 1976.

Analysis: The applicable test for classification was the common parlance test, together with the primary use of the product. Mediker was shown to be an anti-lice treatment, manufactured under a drug licence, used for treating lice infestation, and not for ordinary hair washing. A product used for therapeutic and prophylactic treatment cannot be treated as a cosmetic merely because it is applied like shampoo. The medicinal character of the product was held to be its dominant and only function.

Conclusion: Mediker was held to be a drug or medicament and not a shampoo, and it was not liable to entry tax.

Issue (ii): Whether Revive instant starch was a chemical falling within the entry for chemicals and acids in Schedule II of the Madhya Pradesh Entry Tax Act, 1976.

Analysis: The burden lay on the revenue to establish that the goods were taxable under the claimed entry. Revive instant starch was shown to be starch made from tapioca roots and used for washing clothes. In common parlance it was not regarded as a chemical, and no supporting material was produced to prove that it answered the description of chemicals or acids in the schedule.

Conclusion: Revive instant starch was held not to be a chemical, and it was not liable to entry tax.

Final Conclusion: The levy of entry tax on both products was unsustainable, and the appeal failed.

Ratio Decidendi: For classification under a fiscal entry, the goods must be understood in common parlance according to their primary use, and the revenue must adduce evidence to justify taxation under the specific charging entry.

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