STATE OF GOA Vs. LEUKOPLAST INDIA LIMITED

JUDGEMENT

(1.) Leukoplast (India) Limited, the assessee-Company was granted a licence by the Drugs Controller under the Drugs and Cosmetics Act 1940. It was amended on September 7, 1987. Under this licence, the assessee was entitled to produce inter alia Zinc Oxide Adhesive Plaster B.P.C. (Leukoplast). Surgical Wound Dressing (Handyplast); Balladona Plaster B.P.C.; Capsicum Plaster B.P.C. and Cotton Crape Bandages B.P.C., (Leukocrapes).

(2.) The aforesaid goods or products were liable to local sales tax as well as Central Sales Tax and prior to 1-11-1981, the rate of the local sales tax leviable on them was at the rate of 6 per cent, and under Section 8 (2A) of the Central Sales Tax Act, the rate of tax was 4 per cent. By the Notification No. 14/41/81-Fin (RandC), dated 28-8-1981, drugs and medicines were exempted from the levy of local sales tax in excess of 3 per cent and thus, according to the assessee-Company, as a result of this exemption, the Central Sales Tax leviable under Section 8 (2-A) of the Central Sales Tax Act was also reduced to 3 per cent.

(3.) The assessee-Company, however, had been paying Central Sales Tax at the rate of 4 per cent on the sale of the goods and also local sales tax at the rate of 6 per cent, from 1-11-1981 to 1-4-1987.