TMI Blog2008 (5) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... 2002, 2112 of 2007, 3270, 3271 of 2008 - - - Dated:- 5-5-2008 - ASHOK BHAN AND DALVEER BHANDARI JJ. Dhruv Aggarwal, Senior Advocate, (Praveen Kumar, Advocate with him) for Intervener in C. A. No. 6636 of 2002. Aarohi Bhalla, Manoj Kr. Dwivedi for (G. Venkateswara Rao), Advocates for the petitioner. S.K. Bagaria, Senior Advocate (Kavin Gulati, Ms. Rashmi Singh, Avnish Pandey for Kamlendra Mishra, Advocates with him) for respondents in C. A. No. 6636 of 2002. -------------------------------------------------- P.K. JAIN J. In the assessment year 1994-95, the applicant's disclosed turnover was accepted by the assessing authority. The admitted tax liability was, however, not accepted with regard to the sale of "Swad", candy, "painjon" and "bubble gum". The assessee claimed that "bubble gum" was sweetmeat (confectionery item), "Swad" tablets were ayurvedic medicine and were taxable as such. The assessing authority did not accept this claim of the revisionist and held that both "bubble gum" and "Swad" tablets were unclassified items and were taxable as such. In respect of sale of "painjon", the claim of the dealer was that it contains part of "paracetamol" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is non-Scheduled medicine is also not correct. Decision of the Rajasthan Taxation Tribunal in Khandelwal Drug Agencies v. Commercial Taxes Officer, "E" Circle, Jaipur [1997] 104 STC 204, was relied upon by the Deputy Commissioner (Appeal) but the Tribunal in the impugned order held that the decision aforesaid is not correct. The said decision cannot be ignored in such a manner. Sri Pandey, learned Standing Counsel has, however, submitted that the decisions of other Tribunal are not binding upon the Trade Tax Tribunal in question and adequate reasons are recorded for taking a different view. As to the first ground taken by the learned counsel for the revisionist it may be pointed out that in paragraph 6 of the memo of revision it is stated that it is apparent from the perusal of the memo of appeal filed by the department before the Tribunal that the same was registered as defective Appeal No. 31 of 1998 as the appeal was filed belatedly by the department. Since no application under section 5 of the Indian Limitation Act was filed along with the memo of appeal by the department before the Tribunal, the applicant filed objection in regard to delay in filing the appeal before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that "bubble gum" was taxable as sweetmeat (confectionery). Learned counsel for the applicant has submitted that the first appellate authority was bound to follow the decision of the Tribunal and therefore, no error was committed by the first appellate authority in holding that "bubble gum" was taxable as sweetmeat/confectionery. As already pointed out above the submission of Sri Pandey, learned Standing Counsel, is that the Tribunal was not bound by the decision of another Tribunal. It may be pointed out here that section 10 of the U.P. Trade Tax Act, 1948 provides for formation and functioning of the Tribunal. Sub-section (1) of section 10 of the Act provides that there shall be a Tribunal consisting of such members including a President as the State Government may, from time to time, deem it necessary to appoint. Thus, the legislation provides for forming of one Tribunal only though for convenience sake different Benches are formed by the President of the Tribunal. The decision given by the one Bench of the Tribunal is decision of the Tribunal constituted under section 10 of the Act. It is expedient that different Benches should not take different views on the same question o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1975] 35 STC 127 (All); [1974] UPTC 620 (All). Learned Standing Counsel has, however, pointed out that the Tribunal has relied upon the decision in Pappu Sweets and Biscuits v. Commissioner of Trade Tax, U.P., Lucknow [1998] 111 STC 425 (SC); [1998] UPTC 1086 (SC); [1999] STJ 140 and submitted that toffee is not covered by term of "sweetmeat". The facts in the aforesaid decision were that Pappu Sweets and Biscuits established a new industrial unit for manufacturing toffees. It applied to the Joint Director of Industries, Bareilly, for eligibility certificate. The Joint Director of Industries rejected the application on the ground that toffee is "sweetmeat" and therefore, the appellant's new industrial unit being a unit of the type mentioned in annexure II to the notification was not entitled to exemption. An appeal filed before the Trade Tax Tribunal was dismissed by the Tribunal. The revision filed before the Allahabad High Court was also dismissed. While considering the notification under which exemption was claimed the honourable Supreme Court held that "it is true that dictionary meaning of the word 'sweetmeat' is very wide and any food which is sweet and rich in sugar ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is defined to be "sweet edibles as candy, cake, pastry, candied fruits and often cake and ice cream". Candy is further defined as a food made of sugar paste or syrup often enriched and varied with colouring and flavouring (as chocolate) and filling (as fruit and nuts) and shaped into various attractive forms. The distinction clearly indicates that the "bubble gum" and "chewing gum" are confectionery. One of the grounds taken by the Tribunal in holding that "bubble gum" and "chewing gum" are not confectionery is that it contains gum and it is actually used by the children for fun or as mouth refresher. It is observed that it contains lesser quantity of sugar. The Tribunal has, however, not given the ratio of sugar and gum in the "chewing gum and bubble gum". On the other hand, it may be noted that Chapter 17 of the Central Excise Tariff Act, 1985 relates to sugar and sugar confectionery and at Sl. No. 1704.10 the entry is "chewing gum" whether or not sugar-coated. Thus, the Central Excise Tariff Act treats the "chewing gum" as confectionery and the said Act being the Central Act would be applicable to the State of U.P. In my view, therefore, though "chewing gum and bubble gum" ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ionery article and levied the tax accordingly. When the Tribunal held that: "6. In common parlance, medicine means a substance or a preparation used in the prevention or treatment of disease and must have curative power so as to make it effective for treatment of ailment. 7.. Section 3(a), Drugs and Cosmetics Act, 1940, states: In this Act, unless there is anything repugnant in the subject or context: ' "Ayurvedic, Siddha or Unani drug" includes all medicines intended for internal or external use for or in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, and manufactured exclusively in accordance with the formulae described in the authoritative books of Ayurvedic, Siddha and Unani (Tibb) systems of medicine specified in the First Schedule.' Accordingly, Ayurvedic, Siddha and Unani drugs include all medicines manufactured exclusively in accordance with the formulae prescribed in the authoritative books of these systems of medicines and specified in the First Schedule of the Drugs and Cosmetics Act, 1940. 'Ayurvedic formullary of India' has stated in its preface, introductory chapter and the 'legal notice' chapter that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is prepared as per formula of any authoritative medical text book. As already pointed out above that many times it is usual for the manufacturers who sell their products to exaggerate the virtues and effect of their products for use by the consumers. As already held by the Gujarat High Court in Dandwala's case [1993] 88 STC 459 that the true character cannot be ascertained from description of the product in advertisement or label as an ayurvedic medicine. To decide this, one shall have to look to the character of the constituents and the use of the product. It was also held in that case that mere obtaining licence under certain Acts and getting clearance under certain other Acts cannot entitle a person to obtain benefits under the Act. I respectfully agree with the aforesaid observations of the Gujarat High Court in Dandwala's case [1993] 88 STC 459 (Guj). It has been pointed out by the learned Standing Counsel that the Tribunal has observed in its order about the constituents of the "Swad" tablets and it is pointed out according to the observation of the Tribunal that the ingredients of the commodities in question are "black salt", "senddha salt", "nambuka namak", "kali much", "j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Sales Tax Tribunal, Branch-II, Ghaziabad. The Tribunal in detail discussed the controversy involved in the case. Under the U.P. Sales Tax Act, 1948 a notification fixing the rate of tax on bubble gum for the year 1994-95 was not issued. Under the Government Notification No. Vya Ka.-2-1225/Eleven dated March 31, 1992 and Notification No. Vya.Ka.-2-3403/Eleven dated October 1, 1994, the liability for payment of tax has been fixed for sweets, sweetmeat, namkeen, cooked food, revadi, gajak, biscuit, double-bread, cake, pastry, rusk and the products of sugar under the U.P. Sales Tax Act, 1948. It is pertinent to mention here that the official language of the State of Uttar Pradesh is Hindi. If any difference is found between the notifications in English and Hindi, the notification issued in Hindi will be applicable. On the said notification, the courts have decided that confectionery comes within sweets (mithai) and sweetmeat, but it has not been mentioned that bubble gum comes within the category of a sweet. This court in the case of Pappu Sweets and Biscuits v. Commissioner of Trade Tax, U.P., Lucknow [1998] 7 SCC 228 See [1998] 111 STC 425 (SC)., observed thus: "12 See para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut it was so held in a different context and no evidence was led by the State to show that thereafter, the dealers in toffees and consumers started treating them as sweetmeat. In the Hindi version of the notification for the word sweetmeat the word 'mithai' is used. The word 'mithai' has a definite connotation and it can be said with reasonable amount of certainty that people in this country do not consider toffee as 'mithai'. The High Court committed a grave error in holding that as some manufacturers of toffees sell their products by describing them as sweets it can be said that in commercial circles toffee is known as sweetmeat." If the ratio of the aforesaid judgment is properly comprehended then bubble gum in the common parlance cannot be construed as mithai (sweetmeat). When we apply common parlance test and in fact ask someone to bring the sweets from the market, he will never bring bubble gum. In common parlance, even items of confectionery will not be construed as sweetmeat (mithai). In fact, bubble gum is not an item for eating. It is kept in the mouth and after chewing the same is thrown out. The bubble gum while kept in the mouth by the children is also inflated as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved by the said judgment of the Tribunal filed a revision petition before the High Court of judicature at Allahabad. The High Court came to the specific finding that the bubble gum cannot be treated as a sweetmeat but it is certainly an item of confectionery. In the impugned judgment, the High Court gave no reasons for its finding. The respondent did not give any break-up of the ingredients of bubble gum. It was never the case of the respondent that bubble gum is a sugar product. Confectionery is not even mentioned in the notification. The High Court ought to have properly comprehended the object of the notification. In the facts and circumstances, the High Court should have applied common parlance test to determine proper categorisation of bubble gum. It may be pertinent to mention that the respondent has not filed any appeal against the said finding of the High Court that bubble gum is not a sweet- meat. The appellant aggrieved by the judgment of the High Court dated November 9, 2001, has preferred this appeal. The dispute is confined to the assessment year 1994-95. According to the respondent, bubble gum was covered by the specific entry at Sl. No. 48 of notification d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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