TMI Blog1946 (6) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the Act, the applicants' turnover was less than Rs. 50,000 and they are not liable to taxation under clause (c). The Commercial Tax Officer, however, assessed the applicants on the grounds that dispensing chemists are manufacturers and, since the applicants' turnover during the year before the commencement of the Act exceeded Rs. 10,000, they are liable to assessment pursuant to clause (a). The Commissioner of Commercial Taxes, Bengal, and the Board of Revenue, to whom respectively an appeal and a petition for revision were preferred by the applicants, upheld the assessment. The Com- missioner expressed the opinion that mixing different medicinal ingredi- ents into an ultimate mixture suitable for use by particular classes of patient consumers according to the manner prescribed by medical men is the manufacture of medicines. The view stated by the Board was that the applicants' business of compounding preparations for use by individual customers is manufacture or production of an entity, different essentially from its ingredients. Three questions are referred by the Board to this Court; they are as follows: (i) Whether, on the facts proved, the petitioners' business is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces goods for sale within the contemplation of Section 4, sub-section (5), clause (a), of the Bengal Act. Under the Bengal Act, a dealer is liable to pay sales tax who manufactured or produced goods for sale and whose gross turnover exceeded Rs. 10,000 during the year preceding the commencement of the Act. Section 2 of the Act defines "dealer" as- "any person, firm or Hindu joint family, engaged in the business of selling or supplying goods in Bengal." It is not in dispute that the applicants are dealers within the meaning of Section 2 and that their gross turnover is within clause (a) of sub-section (5) of Section 4 of the Act. I think the answer to the question, whether a dispensing chemist is such a dealer, is to be found by reference to the goods which he sells and what is done by him with respect to those goods before they are supplied. Prescriptions specify the components of resultant mixtures or compounds which are obtained when the prescriptions are dispensed. They may be for internal use, for example, liquids in bottles, and solids in capsules, or for outward application, for example, ointments, plasters and powders. When customers give prescriptions to a dispensing ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when it is shown: (i) that he is a dealer and (ii) that he is liable to pay tax under the Act. As to (i): "Dealer" is defined in Section 2(c) as meaning- "Any person, firm or Hindu joint family, engaged in the business of selling or supplying goods in Bengal." "Goods" is defined in Section 2(d) as meaning "all kinds of mov- able property" other than certain things specified therein. The defini- tions of "dealer" and "goods" are in very general terms and are co- extensive in scope. "The business of selling or supplying" in which a person may be engaged so as to be a "dealer" may extend over "all kinds of movable propery" (with a few specified exceptions) which may conceivably be capable of being sold or supplied as a vendible or commercial commodity. As to (ii): the liability to pay tax under the Act is imposed on a dealer by Section 4. Sub-section (1) of that section provides that, subject to the provisions of Sections 5 and 6, and with effect from a certain specified date, every dealer, whose gross turnover during the year immediately preceding the commencement of the Act exceeded the taxable quantum, shall be liable to pay tax under the Act on all sales effected after that da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial) into forms suitable for use", or "to make or fabricate from material; to produce by labour (now especially on a large scale)." As a noun the term connotes "the action or process of making articles or material (in modern use on large scale) by the application of physical power or mechanical power" or "an article or material produced by the application of physical labour or mechanical power". These meanings may help but are not decisive for, what we have to ascertain is what those expressions mean in the context in which they are used in the Act. I shall not, therefore, attempt to for- mulate any abstract definition of such general expressions as "manu- facture" or "Produce". In the absence of any definition in the Act of these particular terms, I have to read the section itself and then to as- certain the meaning from the words used. The relevant words in clause (a) are: "in relation to any dealer who....................himself manufactures or produces any goods for sale." I find that there are two expressions in this clause, namely, "dealer" and "goods", which have been defined in the Act. I apply those definitions to those words, and find that the clause refers to any perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sformed into a totally different thing in their character and properties, or it may result in what is called a mechanical or physical mixture, in which each drug retains its original properties. But in either case the resulting mixture is a distinct product brought into being in a particular form suitable for the particular use for which it is intended and capable of being sold or supplied for a price. When a man goes into a chemist's shop with a prescription he does not ask for this, that or the other drug mentioned in the prescription, but he really wants the finished product in a form in which as a medicine it will be suitable for the use of the patient and when the chemist compounds the drugs according to the prescription he produces that medicine and sells, not so many different drugs of different quantities or measures, but the finished product. The selling of the finished product is his business and he brings it into being for sale in his business. This finished product is different from the ingredients with which it is made, just in the same sense as an ornament is different from the lump of gold or a pair of boots different from the leather or a suit of clothes is differen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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