- (1.) M. C. AGARWAL, J. This revision petition under section 11 of the U. P. Sales Tax Act, 1948 has been preferred by the Commissioner against an order dated February 16, 1991 passed by the Sales Tax Tribunal, Lucknow, whereby it allowed the dealer's appeal No. 28 of 1990 against the Commissioner's decision under section 35 of the U. P. Sales Tax Act, 1948.
(2.) I have heard Sri Rajiv Sharma, learned counsel for the revisionist and Sri Bharatji Agrawal, learned Senior Advocate for the respondent. The respondent has a factory at Bareilly where it manufactures camphor as its main product and several other commodities are also manufactured. The dealer applied to the Commissioner for his decision as to whether (1) pine oil, (2) dipentene oil, (3) fenchone oil, (4) pine tar oil, (5) citwanene oil, (6) mint oil and (7) camphor oil, were oils and were taxable as such. Entry No. 31 deals with oils. The said entry was as under. " 31, Oils of all kinds, other than those covered by any other entry of this list or by any other notification issued under the Act. " The Commissioner held that the aforesaid entry covered oils that were used for cooking, etc. , and that the oils in question has smell and some of them were used for manufacturing paints and varnishes and others were used for adding fragrance to soaps, cosmetics, toothpaste, etc. , and, therefore, were taxable as scents and perfumes. The dealer appealed to the Tribunal and the Tribunal has, by the impugned order, held that the oils in question were covered in entry No. 31 and were not excluded by any other entry and, therefore, they were taxable as oils.
(3.) THE learned Standing Counsel contended that the aforesaid oils were not edible oils nor they can be used for application to body, etc. , and they were being used for adding smell and fragrance to paints, varnishes, soaps, etc. , and therefore, they could not fall under the aforesaid entry. He placed reliance on Industrial Gases Ltd. v. Commissioner, Sales Tax, U. P. , Lucknow [1968] 21 STC 124 in which a division Bench of this Court held that oxygen gas used for industrial purposes was a chemical but when sold for medicinal purposes, it was a medicine. This analogy in my view is not applicable to the present case. THE entry is wide enough and covers oils of all kinds other than those covered by any other entry of the list by any other notification issued under the Act. Admittedly, there is no other entry that covers oils in question nor there is any other notification dealing with the aforesaid oils. THEre is no dispute that the aforesaid commodities are oils and, therefore, unless the oils in question are covered under any other entry, they should necessarily fall in entry No. 31. THE Commissioner has held that they are scents and perfumes simply because some of the oils in question are used in the manufacture of paints and some are used for adding smell and fragrance to soaps, paints, etc. In other words, the Commissioner has not held that any of the oils is directly used as scents or perfumes directly on the body. In A. Boake Roberts and Co. (India) Ltd. [now Bush Boake Allen (India) Ltd. ] v. Board of Revenue (Commercial Taxes), Chepauk, Madras-5 [1978] 42 STC 270, the honourable Madras High Court held that synthetic essential oils which were not utilised for the purposes of beautifying the body by direct application to the body but were utilised for the purpose of making toilet requisites such as soaps, powders or cosmetics and various other items, were not taxable as scents and perfumes. In Mettur Sandalwood Oil Co. v. State of Madras [1965] 16 STC 9 also the Madras High Court held sandalwood oil was not a perfume though it was used for making perfumes. In G. Radhakrishna Murthi and Co. v. Commercial Tax Officer-IVB, Vijayawada [1999] 113 STC 161; 1998 (2) UPTC 906, the honourable Supreme Court held that agarbattis were not taxable as scents and perfumes. THErefore, the oils in question which are not shown to be used as scents or perfumes by direct application to the body cannot be treated as scents or perfumes and the Commissioner's order on this point was untenable. I find that the Tribunal has rightly held that the aforesaid goods were covered by the description "oils of all kinds" and are, therefore, taxable as such. This revision petition, therefore, has no force and is hereby dismissed. Petition dismissed. .;