AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 408
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....aners; and (iv) Dettol Antiseptic Liquid for the purposes of Kerala VAT Act, 2003 (hereinafter referred to as "KVAT Act"). It was the case on behalf of the appellant that the products at (i) to (iii) were classifiable under Entry No. 44(5) of the III Schedule to the Kerala VAT Act as being 'pesticides, insecticides' corresponding to HSN Code 3808 and therefore subject to VAT at the rate of 4%. With respect to the product at (iv) hereinabove, it was the case on behalf of the appellant that 'Dettol Antiseptic Liquid' is correctly classifiable under Entry 36(8) (h) (vi) being medicaments corresponding to HSN Code 3004.90 of the III Schedule, and thus also subject to tax at the rate of 4%. 2.1 However, the Commissioner of Commercial Taxes, rejected the contention of the appellant holding that the products (i) Mortein Mosquito Coil, Mat and Liquid Vaporizer is classifiable under Entry 66 of Notification SRO 82/06 dated 21.01.2006 issued under Section 6(1)(d) of the Kerala VAT Act which covers "Mosquito Repellants, electric or electronic mosquito repellants, gadgets and insect repellants, devices and parts and accessories thereof" corresponding to HSN Code 8516 79 20; (i....
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....than those given in subentries (i) to (v) 3004.90 Entry 66 of Notification No. SRO No. 82/2006, G.O.(P) No. 4/2006/TD Dated 21st January 2006. LIST OF GOODS SL.NO. Description of goods HSN Code (1) (2) (3) 66 Mosquito repellents, electric or electronic mosquito repellents, gadgets and insect repellents, devices and parts and accessories thereof 8516.79.20 3. Shri Siddharth Bawa, learned counsel has appeared on behalf of the appellant and Shri C.K. Sasi, learned counsel has appeared on behalf of the respondents. 4. Learned counsel appearing on behalf of the appellant has vehemently submitted that in the facts and circumstances of the case the High Court has materially erred in not accepting the case on behalf of the appellant that the products item nos.1 to 3 hereinabove shall be classifiable under Entry 44(5) of III Schedule of KVAT Act. 4.1 It is submitted that the High Court has materially erred in accepting the case on behalf of the Commissioner that the aforesaid products nos. (i) to (iii) shall fall under Item No.66 of SRO 82/2006 and therefore liable to be taxed at 12.5% 4.2 It is further submitted that the High Court has also erred in holding th....
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.... claiming the tax at 4%. 4.7 So far as the product Harpic & Lizol is concerned, it is the case on behalf of the appellant that the State of Kerala issued a notification dated 24.10.2006 retrospectively effective from 07.01.2006 omitting HSN Code 3808 from Entry 44(5) of III Schedule of KVAT Act. It is submitted that Harpic & Lizol would still continue to fall in Entry 44(5) even after deletion of HSN Code 3808, as they are disinfectants under the Drugs & Cosmetics Act/Rules and manufactured under the licence granted as a disinfectant, under the said act. In support of the above, he has relied upon the decision of this Court in the case of Ponds India Ltd. (supra) and Bombay Chemicals Pvt. Ltd. vs. CCE 1995 Supp. (2) SCC 646 and the decision of the Andhra Pradesh High Court in the case of Reckitt Benckiser India Ltd. vs. State of Andhra Pradesh in Tax Revision Case No.10 of 2007. 4.8 Now so far as the product Dettol is concerned, it is the case on behalf of the appellant that the Dettol is an antiseptic liquid, manufactured under a Drug License and it prevents infection. It is submitted that it is considered as an essential drug and hence its price was controlled under DPCO and th....
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....that Licel cures the infection of lice in human hair and is thus therapeutic. It is submitted that applying the same the Dettol is also a medicament. 4.14 It is submitted that in the case of Ponds India Ltd. (supra) in respect of the classification under the Trade Tax/VAT Laws this Court has taken into consideration the definition of 'Drug' as defined under the Drugs & Cosmetics Act, 1940 and the fact that the product is sold under a drug licence since drug or medicine is not defined under the Trade Tax/VAT Laws. It is submitted that the Dettol is manufactured under a drug licence issued under the Drugs & Cosmetics Rules and its price has been regulated by the National Pharmaceutical Pricing Authority under Drug Price Control Orders issued from time to time including DPCO, 2013. 4.15 It is submitted that Rule 123 of the Drugs & Cosmetics Rules provides for certain exceptions to the drugs falling under Schedule K to the extent provided therein. Entry 39 deals with Liquid Antiseptics for household use. The appellant submits that Dettol being an antiseptic falls under Entry 39 of Schedule K provided under Rule 123 of the Drugs & Cosmetics Rules. It is submitted that this Court in th....
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....illing the mosquitoes and it is difficult to hold that it is an insecticide. It is submitted that the product "Mortein Mosquito Coil, mat and liquid vaporizer" would definitely come under Entry 66 "Mosquito Repellent". 6.1 It is submitted that the appellant - assessee is relying Entry 44(5) in support of their case products Mortein range and Mortein Spray shall fall as insecticides under Entry 44(5). It is submitted that Entry 44 related to products which are used in agricultural operations. It is submitted that all the products in that Entry are used in the agricultural field in relation to growing of agricultural products and controlling of pets, insecticides etc. which attacked the plants. 6.2 It is submitted that the product such as Harpic Toilet Cleaner and Lizol Floor Cleaner are not used in relation to controlling pets and insecticides in the agricultural field. It is submitted that the name of these products contains the words "Toilet Cleaner and Floor Cleaner". It is submitted that the use of "Harpic Toilet Cleaner" and "Lizol Floor Cleaner" is exclusively for cleaning of toilet and floor respectively and therefore cannot be treated as insecticide. 6.3 It is submitted t....
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....ic entry the 'Mosquito Repellant', thereafter one is not required to go to the definition under another Act namely Insecticides Act. Sl.No.66 of Notification SRO 82/06 dated 21.01.2006 issued under Section 6(1)(d) of the Kerala VAT Act which covers "Mosquito Repellants". 9.1 Even otherwise it is required to be noted that Entry 44(5) which includes insecticides relates to products which are used in agricultural operations. All the products in the Entry are used in the agricultural field in relation to growing of agricultural products and controlling of pets, insecticides etc. which are attacking the plants. Therefore, in view of the specific Entry 66 of Notification SRO 82/06 dated 21.01.2006 the aforesaid products namely Mosquito Repellants, electric or electronic mosquito repellants, gadgets and insect repellants, devices and parts and accessories thereof are rightly classified as Mosquito repellants. Now so far as the reliance placed upon the decision of this Court in the case of Bombay Chemicals Pvt. Ltd. (supra) is concerned, the said decision shall not be applicable to the facts of the case on hand while dealing with the specific entries under KVAT Act. It was a case under th....
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....ry 27(4) of SRO 82/2006 chargeable to tax at 12.5%. 9.5 However, so far as the product Dettol is concerned, it is the case on behalf of the appellant that Dettol is an Antiseptic Liquid and therefore is classifiable as a drug/medicine under Entry 36(8)(h)(vi). The active ingredients of Dettol are Chloroxylenol IP, Terpineol BP, Alcohol Absolute IP (denatured) and it is an antiseptic having germicidal properties and it kills germs, bacteria and it prevents infection therefore it is applied on wounds, cuts, grazes, bites and stings. It is also used in hospitals for surgical use and medical use. 9.6 Thus the Dettol is used as an antiseptic liquid and is used in hospitals for surgical use, medical use and midwifery, due to therapeutic & prophylactic properties. Therefore, the same can be said to be an item of medicament to be treated as a drug and medicine. Here also the dominant use is a relevant consideration. 9.7 In the case of Ponds India Ltd. (supra) this Court has held that while deciding the issue whether any particular item would be covered under relevant entry or classification, different tests viz. the dictionary meaning, technical meaning, user's point of view, popular me....
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....y 36(8) (h) (vi) as claimed by the appellant and would not fall under the residuary entry as claimed by the Revenue. To that extent the impugned judgment and order passed by the High Court deserves to be quashed and set aside. 10. In view of the above and for the reason stated above, present appeal succeeds in part. The impugned judgment and order passed by the High Court in so far as the products Mosquito Mats, Coils and Vaporizers and Mortein Insect Killers; Harpic Toilet Cleaner and Lizol Floor Cleaners is hereby confirmed. So far as the impugned judgment and order passed by the High Court with respect to Dettol Antiseptic Liquid is concerned, the impugned judgment and order passed by the High Court is set aside and it is held that the product Dettol would fall under Entry 36(8) (h)(vi) of Schedule III of the KVAT Act and shall be liable to be taxed at 4%. Present appeal is accordingly partly allowed to the aforesaid extent. However, in the facts and circumstances of the case there shall be no order as to costs. ------------------------------------------------------------------------------------------------------------------------------------------------------------------ CO....