TMI Blog1984 (11) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case and on a true and proper interpretation of entries 7 and 19 Schedule E to the Bombay Sales Tax Act, 1959 and entry 38 of the notification issued under Section 41 of the Act, the Tribunal was right in holding that the article Forbina powder was not cosmetic covered by entry 19 of Schedule E to the Act but was covered by entry 22 of Schedule End was also eligible to the benefit of entry 38 of the notification issued under Section 41 of the Act ?" . 2. The facts giving rise to the reference are as follows : The respondent is a company limited by shares and is a registered dealer under the said Act. By an application dated 24th June, 1970 made under section 52 of the said Act, the respondent applied to the Commissioner of Sales Tax to determine the correct rate of tax payable on the sales of certain items effected by the respondent. The said items were sold under two bills, both of which were dated 14th May, 1970. The respondent withdrew its request in respect of one of the bills and the items referred to therein and hence the Commissioner considered the question in respect of the goods sold under the other bill. Under that bill, the respondent had sold the powders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as further contended that because a person pays tax on the sale of some goods erroneously considering that such goods are covered by Entry 19 of Schedule E, that would be no ground for classifying such goods in law under that entry. In the said letter, the respondent gave particulars of the contents of the talcum powders in respect of which the determination of rate of tax was sought by it. It is not necessary to refer here to these contents in detail. It was claimed by the respondent, inter alia, that Binaca baby powder contained a substance known as bradasol which was an antiseptic and prevented nappy rash and skin irritations. In respect of Forbina powder, it was stated that it was a body powder and not a face powder. It contained chemicals which had an antiseptic and deodorising effect. It also contained fermocibazol which had anti-bacterial and anti-fungal properties. It was claimed that Forbina powder should really be classified as medicine falling under Entry 22 of Schedule E. In respect of other powders, it was stated that they were body powders as distinguished from face powders and such body powders should not be considered as cosmetics. The Commissioner held that all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wders, as distinguished from body powders, which could be regarded as cosmetics. The Tribunal observed that beautification of the person is a decisive attribute of a cosmetic. The Tribunal held that all the said powders were body powders and must be really regarded not as cosmetics but as toilet articles. The Tribunal held that toiletry signifies a preparation for sprinkling or rubbing over the skin of the body as after bathing, usually with soothing or antiseptic ingredients and all the said powders fell within this description. In connection with the aforesaid replies received from certain manufacturers, the Tribunal took the view that these replies only showed how these manufacturers classified the talcum powders manufactured and sold by them for paying tax on the sales of those powders and not as to how Entries 7 and 19 of Schedule E were understood by these manufacturers in the commercial sense. This is clear from the observations of the Tribunal in paragraph 18 of its judgment. It was thus held that the information supplied by these manufacturers did not shed light on the crucial aspect of the matter nor did these replies show that the said manufacturers regarded the said art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of trade parlance. 4. Before considering the merits of these rival submissions, it will be useful to refer to the relevant entries in Schedule E to the said Act. Schedule E to the said Act sets out a list of goods, the sale or purchase of which is subject to sales tax, general sales tax, purchase tax and retail sales tax and the rates of sales tax, general sales tax and purchase tax. The said Schedule is under Sections 10, 13 and 14 of the said Act. At the relevant time, the portion of Entries 7 and 19 of Schedule E with which we are concerned read thus : Sr. No. Description tax Rate of sales sales tax Rate of general (1) (2) (3) (4) 7. Toilet articles including hair cream, hair tonic and hair oil (but excluding soap, tooth-powder and tooth-paste) Eight paise in the rupee the rupeeThree paise in 19. Perfumes, depilatories and cosmetics (except soap and articles specified in entry 7 in this Schedule) the rupeeTen paise in the rupee Three paise in It may be mentioned here that entry 22 of this Schedule is a residuary entry. A plain reading of entries 7 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of these decisions, there can be no dispute that entries in Schedule to a sales tax law must be generally interpreted in accordance with trade parlance or common parlance of persons dealing in such items. In the present case, however, as we have pointed out, the Legislature itself contemplated that there were articles which could be regarded as cosmetics as well as toilet articles in trade parlance. This is clear from the language of the descriptive part of entries 7 and 19 of Schedule E as we have pointed out. In view of this, even if the Revenue establishes that in trade parlance certain articles are regarded as cosmetics this would not conclusively show that such articles should be classified under entry 19 and not under entry 7. Before that is done, it should further be established in trade parlance the articles in question were regarded as cosmetics and not as toilet articles (emphasis supplied*). There is nothing to show that the Revenue has established either of the above requisites in the present case. Mere replies from certain manufacturers that they paid sales tax and general sales tax on the sale of certain talcum powders on the footing that they were covered by Entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m cosmetic is primarily applied to any preparation used on the human body to improve the beauty of hair, skin or complexion, whereas a toilet article is an article used in the process of cleansing and grooming one s person. This is clear from the fact that the word toilet is defined as the act or process of dressing. We may set out here the meaning given to the term toilet powder in Webster s New International Dictionary of the English Language. The relevant definition given there runs thus (page 2660) : Toilet Powder : A fine powder usually with soothing or antiseptic ingredients used to sprinkle or rub over the skin of the body as after bathing, usually distinguished from powder used is a cosmetic for the face. Bearing in mind these definitions which reflect the sense in which the cosmetic and toilet articles are usually regarded in ordinary parlance, it would appear to us that the said talcum powders manufactured and sold by the respondent in respect of which determination was sought under the said application must be regarded as articles of toilet. The main purpose why a body powder is used is just to freshen one s body, generally after a bath, for getting a feeling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a powder must be regarded as medicine and is entitled to exemption from the payment of general sales tax under the said notification. The Tribunal has set out the contents of Forbina powder. These contents have been set out by us earlier. The judgment of the Tribunal shows that out of these components of Forbina powder, there are only two which could really be said to have medicinal or therapeutic properties. These are formaldehyde and sulphathia zole. It must be remembered that the composition of Forbina powder shows that the proportion of these two together was one per cent w/w in the total contents of Forbina powder. The discussion in the judgment of the Tribunal shows that the zinc oxide is merely a mild astringent for the skin and protective for slight abrasions and boric acid has feeble anti-bacterial and anti-fungal properties. We are of the view that merely because Forbina powder contains zinc oxide and boric acid it cannot be said to be a medicinal powder particularly in view of the fact that the total percentage of these items is only 5.5 per cent in the composition of Forbina powder. We can only point out that even an article like Eau-de-Cologne, which can by no stretch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision Bench declined to treat the said hair-oil as a medicine on this ground taking the view that such qualities would always be attributed by the manufacturers to hair-oils manufactured by them. We may mention incidentally that it was held by the Division Bench that the words cosmetics and toilet are the words of everyday use. This decision lends support to the view which we have taken in respect of Forbina powder. 9. We may point out that it is significant that in most sales tax laws, both toilet articles and cosmetics are included in the same entry. This appears to have been the position at the material time in the then Province of C.P. and Berar from the decision in Commissioner of Sales Tax, Madhya Pradesh, Indore v. Shri Sadhna Aushadhalaya [1963] 14 S.T.C. 813, the entry in question being entry 11 of Schedule I, Part I of the C.P. and Berar Sales Tax Act, 1947. The same appears to have been the position under the sales tax law in Gujarat (see B. Shah Co., Surat v. State of Gujarat [1971] 28 S.T.C. 5). Even as far as the State of Maharashtra is concerned, we are informed that the said items are covered under the same entry at present. These decisions lend support to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich we have referred to earlier, clearly shows that the main attribute sought to be given to Forbina powder was that it would produce a feeling of freshness. Such an advertisement would show that the purpose for which Forbina powder was intended to be used, according to the advertisement, was for the purpose of grooming. We may repeat that it is not suggested that an advertisement given by a manufacturer can be decisive in a matter of classification, but it can be considered with other relevant factors. 11. In our view, for the reasons which we have discussed earlier, Forbina powder must be regarded as an article of toilet and not a medicine. 12. The questions referred to us are answered as follows : Q. (a) In the affirmative, that is in favour of the respondent-dealer. Q. (b) On a true and correct interpretation of entries 7, 19 and 22 of Schedule E to the Bombay Sales Tax Act, 1959 and entry 38 of the notification dated 14th August, 1965 Forbina powder is an article of toilet covered by entry 7 of Schedule E. The Tribunal was not right in holding that Forbina powder was covered by entry 22 of Schedule E and eligible to the benefit of entry 38 of the aforesaid notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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