TMI Blog2014 (5) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... another assessee, which also claimed that the nycil prickly heat powder is a drug or medicine under the relevant Entries to the Kerala General Sales Tax Act in Heinz India Ltd. v. State of Kerala [2008 (9) TMI 845 - KERALA HIGH COURT] -The Kerala High Court very extensively considered the medicated talcum powder after going through the various definitions of "drug", "medicine", "cosmetic" and "talc", and ultimately came to the conclusion that the medicated talcum powder includes prickly heat powder - The Kerala High Court rejected the contention as to the theory of medicine and also after considering the basic ingredients of prickly heat powder, came to the conclusion that the base product is only a purified talc. This Court is also of the view that after considering the explanation to the main entry, it is only a medicated talcum powder and it certainly includes prickly heat powder also – This Court agrees with the reasoning of the Kerala High Court and hold that the nycil prickly heat powder is not a "drug" and it is only a medicated talcum powder - Accordingly, the issue in favour of the Revenue and against the assessee - Orders of the Tribunal set aside and restore the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the first sale of Nycil prickly heat powder on the ground that it is a medicine or drug under Entry 20-A of Part C of the First Schedule to the Tamil Nadu General Sales Tax Act. The assessing authority also levied penalty for the two assessment years under Section 12(3)(b) of the Act. The assessing authority was of the view that the nycil prickly heat powder is a product which shall fall under Entry 1(iii) of Part F of the First Schedule relating to talcum and toilet powder and liable to be taxed at the rate of 16 per cent. Aggrieved by that portion of the levy, the assessee preferred appeals before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner also concurred with the finding of the assessing authority and dismissed the appeals. The assessee again took up the matter to the Tamil Nadu Sales Tax Appellate Tribunal. The Appellate Tribunal found that the nycil prickly heat powder is a medicated preparation for the care of skin and by the nature of medicinal composition, the said powder belongs to the category of medicine or drug and it cannot be used as common cosmetic or talcum face or body powder. By holding so, the Appellate Tribunal allowed both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beauty creams, beauty milk, cleaning milk, hair foods, skin tonics, complexion rouge, nail cutters, sanitary towels and napkins, astringent lotions, pre-shave and after-shave lotions and creams, moisturisers of all sorts and personal (body) deodarants. Explanation: Any of the items listed above even if medicated or as defined in Section 3 of the Drugs and Cosmetics Act, 1940 (Central Act XXIII of 1940) or manufactured on the licence issued under the said Act will fall under this item. Section 3(aaa) and (b) of the Drugs and Cosmetics Act, 1940 defines "cosmetic" and "drug" as follows: "cosmetic" means any article intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to, the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and includes any article intended for use as a component of cosmetic. "drug" includes-- (i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings or animals, including preparations appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemical substance, esp. a narcotic, taken for the effect it produces." Collins Concise Dictionary 21stCentury Edition defines "medicine" as "(1) any drug or remedy for use in treating, preventing, or alleviating the symptoms of disease." (2) "the science of preventing, diagnosing, alleviating, or curing disease." (3) "any non-surgical branch of medical science." (4) "the practice or profession of medicine." (5) "something regarded by primitive people as having magical or remedial properties." Cambridge Advanced Learner's Dictionary Thesaurus defines "medicine" as "(1a) a substance or preparation used in treating disease." (1b) "something that affects well-being." (2a) "the science and art dealing with the maintenance of health and the prevention, alleviation or cure of disease." (2b) "the branch of medicine concerned with the nonsurgical treatment of disease." (3) "a substance (as a drug or potion) used to treat something other than disease." 7. Talcum Powder: Talc is a mineral. It is the softest mineral found on the earth and it is used in the talcum powder so that the particles of powder do not prick the human beings. The colour of the talc mineral is white, but it is also fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be taxed under Entry 20(A) of Part 'C' of the First Schedule and the contention of the Revenue is that it should not be considered as medicine, as it falls under Entry I(iii) of Part 'F" of First Schedule to the Act. The relevant Entries have already been extracted in the earlier portion of the order. A reading of Entry I(iii) of Part 'F' of First Schedule would show that it includes face powder, toilet powder, baby powder, talcum powder, powder compacts, powder pads and puffs etc. It is also very significant to note that it does not include prickly heat powder. But an explanation was added to the said Entry, which categorically states that any of the items listed in the entry even if medicated or as defined in Section 3 of the Drugs and Cosmetics Act or manufactured on the licence issued under the said Act will fall under Entry I(iii) of Part 'F' of the First Schedule. The contention of the learned Special Government Pleader for the Revenue is that the prickly heat powder is a medicated talcum powder and it will fall only under Entry I(iii) of Part 'F' of First Schedule by virtue of the explanation to the said entry. 11. Under Section 3(b) of the Drugs and Cosmetics Act, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act itself, (b) where there is any obscurity or vagueness in the main enactment, to clarify the same so as to make it consistent with the dominant object which it seems to subserve, (c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful, (d) an Explanation cannot in any way interfere with or change the enactment or any part thereof but where some gap is left which is relevant for the purose of the Explanation, in order to suppress the mischief and advance the object of the Act it can help or assist the Court in interpreting the true purport and intendment of the enactment, and (e) it cannot, however, take away a statutory right with which any person under a statute has been clothed or set at naught the working of an Act by becoming an hindrance in the interpretation of the same." 14. The Apex Court in Dattatraya Govind Mahajan and others v. State of Maharashtra and another, (1977) 2 SCC 548 also considered the scope of the explanation to a statutory provision and held in paragraph 9 as follows: "9.....It is true that the orthodox function of an explanation is to explain the meaning and effect of the mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Tamil Nadu General Sales Tax Act and the Kerala General Sales Tax Act is that it is an inclusive definition under the Kerala General Sales Tax Act, namely, talcum powder including medicated talcum powder under Entry 127 of the Schedule. But in the Tamil Nadu General Sales Tax Act, only by way of an explanation it is added that any of the items even if medicated or as defined in Section 3 of the Drugs and Cosmetics Act will fall under the Entry I(iii) of Part 'F' of the First Schedule. We feel that there is no much difference between the two enactments, namely, one is an inclusive definition and another is by way of explanation the product was included. In the present case, we also find that the nycil prickly heat powder is a medicated talcum powder. The Kerala High Court very extensively considered the medicated talcum powder after going through the various definitions of "drug", "medicine", "cosmetic" and "talc", and ultimately came to the conclusion that the medicated talcum powder includes prickly heat powder and held in paragraphs 34, 37 and 41 as follows: "34. The expression "talcum powder" has been considered by various courts and consistent thinking is that it is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted talcum powder" under entry 127 of the First Schedule to the Act. In view of this inclusive definition, though Nycil powder has all the qualities and ingredients of medicines and since the same is basically a talcum powder which has preventive and curative power, the same requires to be brought under the special entry rather than the general entry." 16. The Kerala High Court rejected the contention as to the theory of medicine and also after considering the basic ingredients of prickly heat powder, came to the conclusion that the base product is only a purified talc. We are also of the view that after considering the explanation to the main entry, it is only a medicated talcum powder and it certainly includes prickly heat powder also. We agree with the reasoning of the Kerala High Court and hold that the nycil prickly heat powder is not a "drug" and it is only a medicated talcum powder. We are also informed that M/s Heinz India Limited, the petitioner-assessee before the Kerala High Court, had purchased the manufacturing unit of the respondent- assessee before us in respect of prickly heat powder. Accordingly, we answer the issue in favour of the Revenue and against the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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