TaxTMI 
TaxTMI 
1992 (9) TMI 329
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....x, i.e., from the date of communication thereof to the applicant? The assessee is manufacturing a product in the trade name of "Dandwala Keshkalpa" since 1978 and according to the assessee the said product is an ayurvedic medicine. The applicant-assessee had effected a sale of the abovesaid product to M/s. Kantilal Jesingbhai as per bill No. 135 dated June 11, 1981. The applicant-assessee had presented necessary application to the Deputy Commissioner of Sales Tax under section 62 of the Act for determination of the rate of tax payable on the abovesaid sale. The case of the assessee before the Deputy Commissioner was that the said sale was covered under entry No. 26(1) of Schedule II, Part A to the Act, which relates to drugs and medicines. The applicant had tried to show that to the abovesaid sale in respect of which the bill was produced before the Deputy Commissioner, the entry applicable would be the said entry which relates to the drugs and medicines. It was the case of the applicant/assessee that the product sold under the said bill or invoice was a purely an ayurvedic medicine for treatment of various diseases of hair like premature baldness, premature hair loss and their ....
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.... that the hairoil simpliciter would not be containing certain herbs and medicinal properties which are being utilised for the preparation of the product in question. It is also the contention raised by Mr. Pathak that because of the use of certain medicinal properties and the herbs, the product has assumed the character of medicine which is within the abovesaid entry No. 26(1) of Schedule II, Part A to the Act which relates to drugs and medicines. Mr. Pathak has also urged that various persons belonging to different walks of life have certified regarding the true effect of the abovesaid product or preparation and that, relying upon the same, it will have to be accepted that the product in question is a drug or medicine rather than a hair-oil. In view of the abovesaid submissions, Mr. Pathak has urged that the questions referred to us are required to be answered in favour of the assessee and against the Revenue. Any how, Ms. Doshit, the learned Advocate who appears on behalf of the Revenue has urged that, merely because some herbs are being used for the manufacture of the product in question and merely because those herbs have some medicinal qualities which may cure certain disea....
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....uestion is prepared out of the abovesaid herbs having medicinal qualities. Any how it must be incidentally noticed that the herbs which are being used in manufacture of the product, namely, brahmi, amala, bhangara, anant mool, rose flowers, sandalwood powder, "hathidant" and cow milk are known to have certain qualities which would help the healthy growth of the hair and they also cure and prevent certain common diseases relating to the hair and the scalp. Mr. Pathak has invited our attention to the number of certificates in this respect, with a view to urge that the product in question is not an oil or oil simpliciter but it is a medicine. We have a detailed look at those certificates on which Mr. Pathak has placed reliance for buttressing his submission before us. It must be accepted that various people, belonging to different walks of life were impressed by the product manufactured by the applicant-assessee. It appears that these people have issued certificates and opinion in praise of the quality of the product. They have definitely stated in those certificates and opinions that the product prepared by the applicant-assessee was proved to be of a great assistance in curing an....
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....be said that the product in question is a medicine within the meaning of the abovesaid entry 26(1) of Schedule II, Part A to the Act. Mr. Pathak while placing reliance upon certain literature produced along with the determination application, has urged that, the manufacturer has described the product in the literature not as an oil but as an ayurvedic medicinal preparation. We have verified and have seen the literature saying that the product in question should be treated as an ayurvedic medicine only. But it requires to be appreciated that the true character of a preparation cannot be ascertained from the description of the product in the literature or label as an ayurvedic medicinal preparation. To decide this, one shall have to look to the character of the constituents and the use of the product in question. Therefore, in a given case if the dealer or the manufacturer says in the literature that the product in question is not to be treated as a hair-oil but is to be treated as ayurvedic medicine only the same in our view is not of much real significance, while deciding the prime question as to whether such a product is a medicine or drug or not. Mr. Pathak has also urged that....
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....ance of the person using it, is undoubtedly improved. But at the same time it has been pointed out that the product would not fall within the meaning of relevant entry of medicinal preparation under the C.P. and Berar Sales Tax Act. The Deputy Commissioner and the Sales Tax Tribunal in our considered view were perfectly justified in placing reliance upon the abovesaid decision while coming to the conclusion that the product in question would be a hair-oil and not a medicine, even though it contains certain herbs which have got a very good effect on the common complaints of the hair and the scalp. The other decision on which Ms. Doshit has placed reliance is the Bombay High Court decision in C.C. Mahajan and Co. v. State of Bombay [1958] 9 STC 133. In the abovesaid decision the question was in respect of soap and powder which were being used as depilatories. The question was whether the abovesaid soap and powder would be toilet articles or not. Applying the similar test it has been pointed out in the aforementioned decision that, though the abovesaid products were also known as soap and powder, they were in fact being utilised as the toilet preparations and were not merely toi....
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....properties and values for certain common diseases relating to the hair and the scalp and though its use is advised for luxuriant hair growth, and though the manufacturers insist that the same should be treated as medicine and never as a hair-oil, the product is, in reality, nothing but a hair-oil falling within the relevant entry pertaining to hair-oils and not a medicine or drug. We are therefore of the opinion that the Tribunal was justified in holding that the product in question is covered under entry 7 of Schedule III appended to the Gujarat Sales Tax Act, 1969 and not under entry 26(1), Schedule II, Part A appended thereto. We therefore answer and reply the abovesaid question No. 1 in the affirmative against the assessee and in favour of the Revenue. With regard to question No. 2: The question is as to whether the Tribunal was justified in not exercising its discretion in giving the prospective effect to the order of the Deputy Commissioner. Mr. Pathak has urged that the statutory provisions do enable the determining authority to say that the decision or determination order shall have the prospective effect. A reference to the provision contained in section 62(2) of the Ac....