DESAI, J. - (1.) WHETHER "nycil Medicated Powder" is a "toilet article" within the meaning of entry 21a of Schedule E or is a "medicine" within the meaning of entry 13 of Schedule C or is covered by the residuary entry 22 of Schedule E to the Bombay Sales Tax Act, 1959 (hereinafter referred to as the Act) is the question which arises for our determination in this reference. The facts giving rise to the reference are as under : The assessee-firm is a dealer carrying on business in drugs and medicines and is registered as a "dealer" under the Act. The assessee-firm, is also functioning as a distributor of a product known as "nycil Medicated Powder" (hereinafter referred to as "the Nycil powder") manufactured by the British Drug House (India) Pvt. Ltd. , Bombay (hereinafter referred to as "british Drug House" ). The firm made an application under section 52 of the Act to the Commissioner of Sales Tax for determination of the question as to the rate of tax payable on the sales of Nycil powder. In the application it was stated on behalf of the assessee-firm, that Nycil powder is used as a medicated powder for many external skin and other diseases and was, therefore, not a toilet article. Along with the application, the assessee-firm produced a sample bill dated 23rd April, 1968, as well as a copy of the trade pamphlet issued by the manufacturer and a sample bottle of the article in question. Before the Deputy Commissioner of Sales Tax, who heard the application, it was contended on behalf of the assessee-firm that Nycil powder is neither a toilet article nor a cosmetic within the meaning of entry 21a of Schedule E but it was a medicine within the meaning of entry 13 of Schedule C. In the alternative, it was contended on behalf of the assessee that Nycil powder would fall within the ambit of the residuary entry 22 of Schedule E to the Act. The Deputy Commissioner of Sales Tax, by his judgment and order dated 8th April, 1969, held that Nycil powder was a toilet article within the meaning of entry 21a of Schedule E and was liable to tax at the rate specified against the said entry in Schedule E. The Deputy Commissioner of Sales Tax in his judgment observed as follows : " In the instant case it is evident that the Nycil powder is designed to keep the skin clean so as to offer protection against prickly heat and infection, besides giving comfort and freshness. Therefore, even if Nycil is a medicated powder, it nevertheless performs the function of cleaning the skin and soothing it. In view of these basic properties, Nycil powder can certainly be regarded as a toilet article within the meaning of entry 21a of Schedule E. The mere fact that Nycil is a medicated powder and that it required drugs licence for its manufacture is not sufficient to hold that it is a medicine within the meaning of entry 13 (1) of Schedule C and the popular meaning of that item. If the article in question has some hygienic effect, it can be said to be incidental inasmuch as it basically remains a toilet article as it can be seen from its uses and properties. "
(2.) IT is on the strength of these findings that the Deputy Commissioner of Sales Tax took the view that Nycil powder was a toilet article. Being dissatisfied with the determination aforesaid by the Deputy Commissioner of Sales Tax, the assessee-firm carried the matter in appeal before the Gujarat Sales Tax Tribunal (hereinafter referred to as "the Tribunal" ). On behalf of the assessee, a copy of the decision of the Maharashtra Sales Tax Tribunal in Messrs British Drug House (India) Pvt. Ltd. v. The State of Maharashtra (Appeal No. 353 of 1963 decided on July 9, 1965) was produced and relied upon before the Tribunal. The decision contained information regarding "nycil" which is the trade name under which the British Drug House produces and markets the substance known as "chlorphenesin". A copy of the order passed by the Government of India, Ministry of Finance, holding that Nycil powder was liable to be assessed to duty as "p. and P. Medicines" under item No. 14e of the Central Excise Tariff was also produced and relied upon before the Tribunal on behalf of the assessee. The Tribunal, drawing upon the information available from the judgment of the Maharashtra Sales Tax Tribunal referred to above, extensively set out in the judgment particulars regarding the nature and property of Nycil powder and its composition and also made a reference to the recommended use of the article in question as contained on the sample bottle of Nycil powder. The Tribunal, in the light of the ratio of the decision of this court in Messrs Prakash Trading Co. v. The State of Gujarat ([1969] 24 S. T. C. 106), then proceeded to consider the question whether Nycil powder was a toilet article, i. e. , an article which could be used for the purpose of grooming a person by beautifying his appearance. The Tribunal observed that Nycil powder "can be used and is presumably used for the purpose of grooming a person by beautifying his appearance". The Tribunal took the view that Nycil powder was, therefore, broadly speaking a toilet article though it contained certain ingredients which have preventive and curative effect on the skin. The Tribunal further held that merely because the powder contained chlorphenesin in the proportion of 1 per cent. of the total ingredients, which substance had a preventive and curative effect on the skin, as also certain other antiseptic substances in the proportion of 32 per cent. of the total ingredients, it would not mean that Nycil powder is not a toilet article. In this view of the matter, the Tribunal held that Nycil powder is a toilet article within the meaning of entry 21a of Schedule E. As regards the contention of the assessee-firm that Nycil powder was a medicine within the meaning of entry 13 of Schedule C, the Tribunal observed that the medicinal substances, viz. , chlorphenesin, zinc oxide and boric acid formed only 33 per cent. of the total contents of Nycil powder and that the rest of the material was starch and talc. The Tribunal, therefore, held that the fact that Nycil powder contained certain ingredients which could be styled as medicines and which had the effect of protecting and "to a very minor extent" acting as a curative and preventive agent, would not be sufficient to render the article "medicine" within the meaning of entry 13 of Schedule C. In view of the aforesaid findings the Tribunal, disagreeing with the decision of the Maharashtra Sales Tax Tribunal, dismissed the appeal filed by the assessee-firm and confirmed the determination of the Deputy Commissioner of Sales Tax to the effect that Nycil powder was a toilet article within the meaning of entry 21a of Schedule E. The assessee-firm, being aggrieved by the decision of the Tribunal, made an application to the Tribunal requiring it to refer to this court the question of law arising out of its aforesaid order and the Tribunal has accordingly referred to this court the following question of law for its opinion : " Whether on the facts and in the circumstances of the case, 'nycil Medicated Powder' is a toilet article within the meaning of entry 21a of Schedule E or is a medicine covered by entry 13 of Schedule C, or is covered by the residuary entry 22 of Schedule E to the Bombay Sales Tax Act, 1959 ?"
(3.) THE answer to the question referred to us will turn upon the true and proper interpretation of entry 21a of Schedule E and entry 13 of Schedule C to the Act because if Nycil powder is not covered by either of the said two entries, it must, in the absence of any other appropriate entry - and admittedly there is no other appropriate entry which could cover it - fall within the ambit of the residuary entry 22 of Schedule E. We shall, therefore, consider the question referred to us firstly by reference to entry 21a of Schedule E and consider whether Nycil powder is a toilet article within the meaning of the said entry. If we come to the conclusion that Nycil powder is not a toilet article, we shall next consider whether it is "medicine" within the meaning of entry 13 of Schedule C. Before taking up the question of interpretation of these two entries, it would be appropriate to set out at this stage the relevant portions of the said two entries. SCHEDULE c ------------------------------------------------------------------------ Sr. No. Description of goods. Rate of Rate of sales tax. purchase tax. 1 2 3 4 ------------------------------------------------------------------------ (1) Drugs and medicines Three naye paise Three naye paise (other than those in the rupee. in the rupee. specified in entry 69 in this Schedule ). (2) Vitaminised infant Three naye paise Three naye paise milk food sold in in the rupee. in the rupee. sealed containers. ------------------------------------------------------------------------ SCHEDULE e ------------------------------------------------------------------------ Sr. No. Description of goods. Rate of Rate of general sales tax. sales tax. 1 2 3 4 ------------------------------------------------------------------------ 21a Toilet articles including Ten naye paise Three naye paise hair cream and hair tonic, in the rupee. in the rupee. and perfumes, depilatories and cosmetics (except soap as specified in entry 28 in Schedule C [and hair combs as specified in entry 3-D of this Schedule] and hair-oil as specified in entry 7 of this Schedule ). ------------------------------------------------------------------------;