M/S Ponds India Ltd(Merged With ... vs Commnr. Of Trade Tax, Lucknow

The factual matrix of the matter is undisputed. 2 The Legislature of the State of U.P. enacted U.P. Sales Tax Act, 1948. Entry 26(a) as inserted in the Schedule appended thereto by notification No.ST-II-1233/X - 10(1)-1974 dated 14.04.1974 includes petroleum jelly for the purpose of levy of sales tax. It was however, substituted by notification dated 7.9.1981. We would deal with effect thereof on the issue involved herein a little later.

6. The Central Government, in exercise of the power conferred upon it under Sections 6(2), 12, 33 and 33(N) of the Act, made Rules, known as the Drugs and Cosmetics Rules, 1945 (for short, "the Rules").

Indisputably again, the Sales Tax Tribunal by an Order dated 30.3.1990 in respect of assessment year 1981-1982 accepted the notification of the said product as falling under Entry No. 5 being pharmaceutical preparation and, it was therefore, not classified as a cosmetic and toilet preparation. The said order has not been questioned. A similar order was passed by the Sales Tax Tribunal, Ghaziabad on 21.3.1991 relying on its earlier judgment dated 30.3.1990.

or a protective cream against skin irritants. It, therefore, clearly falls under Entry 33.04 and conforms to the description " preparations for the care of the skin (other than medicaments) ". The learned counsel of the appellant has not been able to persuade us to take a different view from the one taken in the majority opinion of the Tribunal. We confirm that the product "Lip Salve" is essentially a preparation for protection of lips and skin and is not a "medicament". Such preparations which have a subsidiary curative or prophylactic value clearly fall under Entries 33.03 to 33.07 as per Note 2 under Chapter 33. The product clearly is covered by Entry 33.04 read with Note 5 of Chapter 33, it essentially being a preparation for protection of lips or skin. We have also gone through the minority opinion expressed by one of the members of the Tribunal and the reasoning therein supported before us on behalf of the appellant. For the reasons aforesaid, we are unable to agree with the minority view. In the result, we find no merit in these appeals and the same are hereby dismissed."

The said decision, therefore, is also not applicable to the facts of the instant case.

Answer to the questions posed therein, therefore, must be found having regard to the facts and circumstances of the cases noticed supra.

35. The authorities referred to hereinbefore clearly show that there does not exist difference of opinion on legal principles. What is however required is the application thereof to the fact of each case and the statute involved.

Entry 5 relates to "cosmetics" and "toilet preparation". If the common parlance test is to be applied, vaseline must come within the purview of cosmetic or toilet preparation. With a view to satisfy the requirements of the said definition, it must be held to be used for beautification or care of the skin in the normal circumstances. If the product, in question does not satisfy the aforementioned twin tests, it is difficult to presume any legislative intention in this behalf despite the fact that Vaseline had been deleted from the entry relating to cosmetic and toilet preparation.

47. We have noticed hereinbefore that the meaning of "drug" is very wide and same has been held to be so in a large number of cases. Balaji 44 (supra) was clearly not applicable whereupon reliance has been placed by the High Court and/or the Tribunal. In our opinion, the impugned judgments, for these reasons, cannot be sustained. They are set aside accordingly.

48. The appeals are allowed with costs. Counsel's fee assessed at Rs.50,000/-.