TaxTMI 
TaxTMI 
TaxTMI 
2018 (9) TMI 2166
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.... Schedule II (renumbered as Entry No.3 of Part III-A of Schedule II w.e.f. 01.04.2012) of the MP VAT Act, 2002, thereby disentitling the appellant from full Input Tax Rebate without any reversal on purchases of RLNG? (2) Whether the MP Commercial Tax Appellate Board is justified in not classifying the cough drops "Halls" which are manufactured and sold by appellant under a valid drug license in the category of Drugs and Medicines as specified in Entry No.19A of Part II Schedule II of the MP VAT Act, 2002 and whether the decision of the Appellate Board is perverse in law? 3. The appellant has manufacturing units at Malanpur and Mandideep in the State of Madhya Pradesh and a sales depot at Indore. The appellant is a registered dealer under the provisions of the Madhya Pradesh Value Added Tax Act, 2002 (for short "the Act"). The appellant is in the business of manufacture and sale of chocolates (Cadbury), Bournvita, toffees and cough drops under the name of "Halls". 4. The appellant claimed full input tax rebate on purchase of Regasified Liquefied Natural Gas (RLNG) after payment of tax at full rate. The RLNG was required as fuel for manufacture of chocolates during the....
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....s not by itself lead to the conclusion that it is not a medicament. 9. Relying upon another judgment of the Supreme Court reported as (2004) 9 SCC 136 (Naturalle Health Products (P) Ltd. v. Collector of Central Excise, Hyderabad) it is argued that the Ayurvedic medicine known as "Sloan's Balm" and "Sloans' Rub" have been classified as Ayurvedic medicines under the Central Excise Tariff Act, 1985. 10. To appreciate the arguments raised, certain provisions of the Statute needs to be extracted, which read as under:- THE MADHYA PRADESH VAT ACT, 2002 "14. Rebate of Input tax (1) Subject to the provisions of sub-section (5) and such restrictions and conditions as may be prescribed, a rebate of input tax as provided in this Section shall be claimed by or be allowed to a registered dealer in the circumstances specified below, - (a) Where a registered dealer purchases any goods specified in Schedule II other than those specified in Part III of the said Schedule within the State of Madhya Pradesh from another such dealer after payment to him input tax for - (1) sale within the State of Madhya Pradesh or in the course of inter-state trade or commer....
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.... initially was part of Part III of Schedule II for the period 01.08.2009 to 31.03.2012 including the year in question but Part III has been substituted as Part IIIA inserted vide Value Added Tax (Amendment) Act 2012 w.e.f. 01.04.2012. The natural gas including compressed natural gas finds mention in Part IIIA of the Schedule II. While substituting the Part III and inserting Part IIIA, Subsection (1AA) of Section 14 of the Act was also inserted vide Amendment w.e.f. 01.04.2011. During the relevant year, the purchase of natural gas is as specified in Part III. 12. Entry 6 in Part-III of Schedule-II for the relevant assessment year 01.04.2011 to 31.03.2012 is natural gas including compressed natural gas. Therefore, such entry would include all forms of natural gas as the said entry does not exclude any form of natural gas but includes specifically compressed natural gas but all other forms of natural gas are part of Entry 6, relating to natural gas. The manufacturing process undergone by the natural gas is not relevant to determine as to whether the same would fall within Entry 6 in the relevant assessment year or not. Section 14(1)(a) of the Act gives right to a dealer to input ta....
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.... meaning with regard to the intendment of the parties as to what was intended to be included and what was not intended to be included, as distinct from an express exclusion. The commercial parlance test will also have to be applied as to whether those in the business consider the two forms of gas as synonymous and interchangeable. Quite obviously the answer has to be in the negative considering the importation of RLNG, additional processes involved and the consequent higher costs involved." 14. Since the term under interpretation in the said judgment was natural gas only and not variants of natural gas, therefore, such judgment will have no applicability to the facts of the present case. In fact, in a judgment reported as 1990 (Supp) SCC 742 (Kishan Lal, etc. v. State of Rajasthan and others, etc.) the word "agricultural produce" was being interpreted which was an inclusive definition to includes all produce whether agricultural, horticultural, animal husbandry or otherwise as specified in the Schedule. It was held as under:- "5. Inclusion of sugar in the Schedule was urged to be arbitrary as it was not produced out of soil the basic ingredient of agricultural produce. ....
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.... of the Constitution was being interpreted, which was an inclusive definition of the expression "State". It was held as under:- "6. That an "inclusive" definition is generally not exhaustive is a statement of the obvious and as far as Article 12 is concerned, has been so held by this Court in the case of Ujjam Bai v. State of U.P. AIR 1962 SC 1621. The words "State" and "authority" used in Article 12 therefore remain, to use the words of Cardozo (Benjamin Cardozo: The Nature of the Judicial Process), among "the great generalities of the Constitution" the content of which has been and continues to be supplied by courts from time to time. 7. It would be a practical impossibility and an unnecessary exercise to note each of the multitude of decisions on the point. It is enough for our present purposes to merely note that the decisions may be categorized broadly into those which express a narrow and those that express a more liberal view and to consider some decisions of this Court as illustrative of this apparent divergence. In the ultimate analysis the difference may perhaps be attributable to different stages in the history of the development of the law by judicial ....
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....r concealment whether in a deceitful manner or not; 2. By a person or by any other person with his connivance or his agent while dealing in securities; 3. So that the same induces another person or his agent to deal in securities; 4. Whether or not there is any wrongful gain or avoidance of any loss. The second part of the definition includes specific instances: (1) a knowing misrepresentation of the truth or concealment of material fact in order that another person may act to his detriment; (2) a suggestion as to a fact which is not true by one who does not believe it to be true; (3) an active concealment of a fact by a person having knowledge or belief of the fact; (4) a promise made without any intention of performing it; (5) a representation made in a reckless and careless manner whether it be true or false; (6) any such act or omission as any other law specifically declares to be fraudulent, (7) deceptive behaviour by a person depriving another of informed consent or full participation. (8) a false statement made without reasonable ground for believing it to be true. (9)....
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....ture of goods. Thus, the orders passed by the Authorities under the Act cannot be said to be erroneous. The question No. 1 is answered accordingly as no error is found in the order passed by the Authorities. 19. The cough drops "Halls" are manufactured under a licence granted by the Licensing Authority i.e. the Directorate of Ayush, Bangalore. As per the order in appeal (Annexure A-3), such Authority has described the said product as candy only. It has also been found that such drops are commonly used as mouth freshener and its medicinal value is nil. 20. Learned counsel for the appellant relies upon Entry 19A of Part II of Schedule II of the Act to contend that the cough drops "Halls" are drugs and medicine manufactured by the appellant under a drugs licence. The fact that such cough drops are sold across counters without prescription of a medical practitioner is not a ground on the basis of which it will cease to be a drug. 21. In a judgment reported as Naturalle Health Products (P) Ltd. (supra), in Civil Appeal No.2072/1996, the question was whether the cough drops and throat drops made by the appellant under a loan licence issued under the Drugs and Cosmetics Act, 1940....
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.... under the Central Excise Act. As held in Amrutanjan Ltd. v. CCE (1996) 9 SCC 413, the mere fact that the ingredients are purified or added with some preservatives does not really alter their character." 22. In another judgment reported as Sharma Chemical Works (supra), the question examined was whether Banphool Oil is a perfumed hair oil or a Ayurvedic medicament. Again while considering the classification of goods in terms of Central Excise Act, 1985, the Court held as under: "12. We have heard the parties and considered the submissions made by them. We have also read the opinion of the majority Bench and the minority opinion of the Technical Member. It is settled law that the onus or burden to show that a product fall within a particular Tariff Item is always on the Revenue. Mere fact that a product is sold across the counters and not under a doctors prescription does not by itself lead to the conclusion that it is not a medicament. We are also in agreement with the submission of Mr. Lakshmikumaran that merely because the percentage of medicament in a product is less, does not ipso facto (as per Corrigendum issued by Supreme Court of India No.F.3/Ed.B.J./92/2003 date....