ASHWANI KUMAR MISHRA,J. - (1.) Revenue is before this Court in revision against an order of the Commercial Tax Tribunal, Ghaziabad dated 5th May, 2017 passed in Second Appeal No.1674 of 2014. Proceedings relate to assessment year 2009-2010 (UP) under Section 28(2) of the U.P. VAT Act. Tribunal by its order has allowed the second appeal of the assessee. Issue raised in this revision is confined to classification of two products i.e. (i) Chlormint with Herbasol and (ii) Happydent White. Tribunal has accepted claim of assessee that 'Chlormint with Herbasol' and 'Happydent White' are ayurvedic medicines manufactured pursuant to drug licence issued under the Drugs and Cosmetics Act, 1940 (hereinafter referred to as 'Act of 1940') and are thus liable to be taxed @ 4% in view of Item 41 of Part 'A' in Schedule-II to U.P. VAT Act. Tribunal has negatived the contention of the revenue that the product is not covered under Entry 41 of Part 'A' of IInd Schedule and is liable to be taxed under the residuary entry in Schedule-V @12.5%. For arriving at such conclusion, Tribunal has placed reliance upon a Division Bench judgment of Uttarakhand High Court in respect of same assessee, and same products, in Commissioner, Trade Tax/Commercial Tax Vs. Perfetti Van Melle (India) Pvt. Ltd., reported in (2009) 19 VST 218 (UTT). Nature of product, relevant literature on the subject and the applicable provisions of law are noticed in the judgment, which shall be dealt with at the appropriate stage.
(2.) The applicable provisions of Uttaranchal Value Added Tax Act, 2005 are on similar lines to the U.P. Value Added Tax Act, 2008. The taxing entry are substantially similar. Item 41, existing in Part-A of Schedule-II of the U.P. Act, as amended from time to time, as also the residuary entry occurring in Schedule-V, are extracted hereinafter:- "S.No.41: Originally as per The Uttar Pradesh Value Added Tax Ordinance (U.P. Ordinance No.37 of 2007) published under Notification No.2643(2)/79-V-I-07-2(KA) 41/2007, dt. 20.12.2007 S.No.41 of Schedule-II Para-A stood as under: "41.Drugs and Medicines including vaccines, syringes and dressings, medicated ointments, light liquid paraffin of IP grade." The above entry has been incorporated in The U.P. Value Added Tax Act, 2008 published in the U.P. Gazette, dt.27.2.2008. W.e.f. 9.4.2008. Above entry at S.No.26 substituted by the following by Noti. No. KA.NI.-2-1021/XI- ........, dt. 9.4.2008 (S.No.15): "41.Drugs and Medicines including vaccines, syringes and dressings, medicated ointments, light liquid paraffin of IP grade; Chooran." W.e.f. 30.9.2008. The above entry at S.No.41 substituted by the following entry by Noti. No. KA.NI.-2-2758/XI-......., dt. 29.9.2008(S.No.24): "41.Drugs and Medicines excluding medicated soaps, shampoo, antiseptic cream, face cream, massage cream, eye gels, and hair oil which are not included in Schedule C, C(1), H or X, of the Drugs and Cosmetic rules, 1945 but including vaccines, medicated ointments, light liquid paraffin of IP grade; chooran; sugar pills for medicinal use in homeopathy." * * * * * SCHEDULE-V {See clause (d) of sub-section-(1) of section-4 of the Uttar Pradesh Value Added Tax Act, 2008} List of goods taxed at 12.5% S.No. Name and description of goods 1 2 1 All goods except goods mentioned or described in Schedule-I, Schedule-II, Schedule-III and Schedule-IV of this Act.
(3.) In the context of the issue raised, the following question is framed for consideration in the present revision:- "Whether on the facts and in the circumstances of the case the Commercial Tax Tribunal was legally justified in holding that chlormint herbasol and happydent white as medicine and not an unclassified commodity?" ;