LexM/S. PONDS INDIA LTD. (MERGED WITH H.L. LTD.) versus COMMISSIONER OF TRADE TAX, LUCKNOW
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[2008] 9 S.C.R. 496 ...... A MIS. PONDS INDIA L TD.(MERGED WITH H.L. LTD.) .. v. COMMISSIONER OF TRADE TAX, LUCKNOW (Civil Appeal No. 3644 of 2008) B MAY 16, 2008 [S.B. SINHA AND V.S. SIRPURKAR, JJ.] UP Trade Tax Act, 1948 - Vaseline White Petroleum ... ;elly - Drug or cosmetic - Determination of - Held: Is a drug - c It protects the skin from the effects of weather and exposure - It is accepted that if used as a preventive measure, it would have a curative value - In any event having regard to the defi- nition of drugs, any product which prevents a disorder of hu- man function would also come within the purview of drug - On D facts, from 1981 to 1989, taxing Authorities themselves held white petroleum jelly of I. P grade (non-perfumed) to be a phar- maceutical preparation - There was no material change after the said period - Burden as regards classification was on the Authorities which they failed to discharge - Revenue could E not depart therefrom, unless there was any material change - Drugs and Cosmetics Act, 1940 - s.3 (aaa) and (b) - Drugs and Cosmetics Rules, 1945 - r 123. The question which arose for consideration in these appeals was whether petroleum jelly is a 'drug' or a 'cos- F metic' within the meaning of the provisions of U.P. Tirade r, Tax Act, 1948. Appellant-assessee was a producer of Vaseline White Petroleum Jelly. He was granted license under the Drugs and Cosmetics Act, 1940. With regard to assessment year G 1981-1982, the Sales Tax Tribunal accepted the notifica- tion of the said product as falling under Entry No.5 being pharmaceutical preparation, thus, was not classified as cosmetic and toilet preparation. The Government analyst also gave report in favour of the appellant. The respon- H 496 PONDS I. LTD. (MER WITH H.L.L.) V COMM. OF 497 TRADE TAX, LUCKNOW ~ dent-revenue did not challenge the order. For the assess- A ment year 1984-85 to 1986-87, similar assessment order was passed; Thereafter, the respondent filed revision ap- plication. It prayed for re-opening of the assessment for the years 1986-1987 to 1988-1989 relying on MIS Balaji Agency's case. The application was dismissed. However, B relying on MIS Balaji Agency's case authorities changed the basis of assessment from assessment year 1989 to ;)/' 1990 onwards without producing any new material or proof to establish that the product was not medicinal preparation and should be classified as cosmetics. With c regard to assessment year 1990-91, 1991-92, 1992-93, the appellate tribunal held that the product Vaseline white petroleum jelly should be taxed @ 12% as cosmetic and toilet preparation. Appellant filed revision petition. High Court dismissed the same. Henc~. the present ·appeal. D ~ Appellant-Assessee contended that from 1990 on- wards the product was held to be pharmaceutical/medi- cine, and there having been no change in the subsequent period, the purported order of classification of goods is illegal; that the burden as regards classification of goods E was on the Revenue and the Revenue did not place any - material on record to discharge the burden; that the prod- uct is a pharmaceutical preparation falling under Entry 29 as it is used for cure and treatment of various skin dis- •• orders; that Entry 5 relating to cosmetics and toilet prepa- · F rations cannot have any application; that the State of U.P. having issued the notification pated 7 .9.1981 whereby Vaseline was deleted from Entry 5, hence, could not have been assessed as a cosmetic and toilet preparation; that commercial meaning or meaning in common parlance G must prevail over the dictionary meaning or technical "I meanings; that the appellant having filed a large number of affidavits in support of its case and the deponents thereof having not been cross-examined, the averments contained therein must have been held to have been ac- · H ' 498 SUPREME COURT REPORTS [2008] 9 S.C.R. A cepted; that if an entry is capable of two meanings, the ·~ meaning which has been accepted continuously should be held to be valid, unless it is held to be an implausible view; and that Mis. Balaji Agency's case being not ex-facie applicable, the tribunal and the High Court erred in rely- B ing thereupon despite the amendment made by the noti- fication dated 7 .9.1981. Respondent-Revenue contended that as Entry 5 con- ..,. tains an elusive definition, it cannot be said to have a fixed meaning but an extend
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