Decided on May 06,1998

V C Ramalingam And Son Appellant


J.Kanakaraj, J. (Chairman) - (1.) O .P. No. 1706 of 1996 is to quash the proceedings of the third respondent in TNGST No. 063 535/94 -95 dated August 16, 1996, which is an order of assessment passed against the first petitioner in respect of the assessment year 1994-95. The dispute relates to the classification of the sale of the goods "Vicco Vajradanti" and "Vicco Turmeric". While the petitioner sought classification under serial No, 20, Part "C" as medicinal preparation, the department treats the goods under serial No. 7, Part "E" and serial No. 1, Part "F" as tooth -paste and as a facial cream.
(2.) O .P. No. 1707 of 1996 is for a declaration that a portion of the entry in Serial No. 1 of Part "F" and a portion of the entry in Serial No. 20(A) of Part "C" of the First Schedule to the Tamil Nadu General Sales Tax Act are ultra vires of articles 14, 19(1)(g) and 300 -A of the Constitution of India. The first petitioner are carrying on business in the said products Vicco Vajradanti and Vicco Turmeric as stock -holders and dealers and market the products. The second petitioner is the manufacturer of the said products. After the introduction of chapter IV -A in the State of Maharashtra the second petitioner applied and obtained a licence to manufacture the above products as ayurvedic drugs. According to the petitioner Vicco Vajradanti comprises of 18 ayurvedic ingredients and it is used for the treatment of tooth disorder like pyorrhoea, swelling gums, bleeding gums, etc. Similarly, Vicco Turmeric is also manufactured from ayurvedic ingredients. It is used for the treatment of diseases relating to the skin eczema, itches, pimples, etc. Even under the Central Excises and Salt Act, 1944, the department sought to classify the items as cosmetic and tooth pastes, but the Bombay High Court held in a judgment dated April 27, 1988 that they are only ayurvedic medicines. The Special Leave Petition filed by the department to the apex Court was dismissed on September 6, 1990. But the attempt of the petitioners to get classification under Indian Standard Institute as a tooth paste or a cosmetics was negatived by the institute on the ground that they were only medicines. While so, for the months of August and September, 1994 the petitioners received communications from the third respondent on October 24, 1994 pointing out that the goods are chargeable at the rate of 12 per cent and 16 per cent respectively and not at the rate of 5 per cent as claimed by the petitioner. Further one Rameshkumar and Company also dealing with very same product approached the Special Commissioner and Commissioner of Commercial Taxes for a clarification and in a detailed order it was ruled that the said products are chargeable under item 7 of Part "E" taxable at 12 per cent and item 1 of Part 'F' chargeable at 16 per cent from the date March 12, 1993 when the entries were suitably amended and that they cannot be classified as medicines under item 20 of part "C". The sum and substance of the petitioner's claim is that very many many decisions have accepted the case of the petitioners that the products are only medicines and therefore, the stand of the department is totally unacceptable. But the petitioners are aware of the amendment to the said entries and how they cause mischief and that is precisely the reason why the petitioners are seeking a declaration that the offending portions are ultra vires the Constitution of India.
(3.) IN the counter -affidavit filed by the respondents it is pointed out that by the Tamil Nadu General Sales Tax (Amendment) Act (32 of 1994), the entries were changed with effect from March 12, 1993 and tooth paste and tooth -powder were taken out of serial No. 7 of Part 'E' of the First Schedule and they were included in serial No. 1 of Part 'F' taxable at 12 per cent at the first and second point of sale as per the charging Section 3(2 -B) of the Tamil Nadu General Sales Tax Act, 1959. Similarly, by the same amendment vanishing cream, etc. were made chargeable under item No. 1 of part "F" taxable at 16 per cent at the first and second point of sale under the said charging Section 3(2 -B) of the Tamil Nadu General Sales Tax Act, 1959. The counter-affidavit proceeds to narrate the changes undergone by the said entries to emphasise the point that under the current entries neither Vicco Vajradanthi nor Vicco Turmeric can escape the classification as made by the Special Commissioner in his clarification dated April 6, 1994 and as per the impugned order of assessment. It is also pointed out that the decisions of the Appellate Tribunal, Chennai in T.A. Nos. 355 and 361 of 1992 dated June 15, 1992 cannot help the petitioners because the entries have been changed from March 12, 1993. It is also argued that the decisions of various other High Courts, cannot be compared and applied in the present case because the entries are different. So far as the question of the vires of the relevant entries, the counter-affidavit points out that it is the prerogative of the Legislature to pick and choose any article for the application of any rate of tax having regard to the economic conditions of the State. Equally the fact that the petitioners have not collected tax at the higher rate is not a ground to give the benefit of a lower rate to the petitioners. Argued the Revenue, that words of everyday use must be understood and given a meaning which is acceptable in common parlance. In other words, the words must be understood in the popular sense.;

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