M/s.Jain Distributors18 KondithopeChennai 600 079 v. 2. The Commercial Tax Officer,Vallalarnagar, Assessment Circle,Chennai

In the High Court of Judicature at MadrasDated :- 29.11.2007Coram :The Honourable Mr.Justice K.RAVIRAJA PANDIANandThe Honourable Mrs.Justice CHITRA VENKATARAMANW.P.No.44482 of 2002M/s.Jain Distributors18 KondithopeChennai 600 079.... Petitioner Vs. 1. The Registrar,Tamil Nadu Taxation Special TribunalChennai.2. The Commercial Tax Officer,Vallalarnagar, Assessment Circle,Chennai. 3. The State of Tamil Nadu rep. By its Secretary, Department of CommercialTaxes and Religious EndowmentsFort St. GeorgeChennai.... RespondentsPRAYER: Writ petition under Article 226 of the Constitution of Indiapraying for the relief of issuance of writ of Certiorarified mandamus tocall for the records of the first respondent in T.P.No.161 of 2001 quashthe same and declare Entry 7 of Part of the First Schedule of the TNGSTAct, 1959 to the effect that "all tooth pastes whether or not medicated oras defined under the Drugs and Costmetics Act, 1940, is liable to therate of 12%" is illegal and consequently the exclusion of the productscapable of being used as tooth pastes which is otherwise a medicalformulation or preparation ready for use externally for treatment ofmitigation or prevention of diseases or disorders in human beings oranimals which is otherwise liable to tax at 5% under Entry 20A of Part Cof the I Schedule of the Act, as ultravires of Article 14 read withArticle 19(1)(g), Article 21 and Article 301 of the Constitution of India. https://hcservices.ecourts.gov.in/hcservices/ For Petitioner :- Mr.Chandran KaruppiahFor Respondents:- Mr. Mr.Haja Naziruddin, Special Government Pleader(Taxes)JUDGMENT(Order of the Court was made by CHITRA VENKATARAMAN,J.)The writ petition is filed against the order of the Tamil NaduTaxation Special Tribunal dismissing the original petitions filed by thepetitioner challenging the condition prescribed under Entry 7 of PartE of the First Schedule of the TNGST Act, 1959 to the effect that alltooth pastes whether or not medicated or as defined under the Drugs andCosmetics Act, 1940, is liable to the rate of 12%, is illegal andconsequently, the exclusion of the products capable of being used as toothpastes which is otherwise a medical formulation or preparation ready foruse externally for treatment of mitigation or prevention of diseases ordisorders in human beings or animals which is otherwise liable to tax at5% under Entry 20A of Part C of the I Schedule of the Act, is ultra viresof Article 14 read with Article 19(1)(g), Article 21 and Article 301-A ofthe Constitution of India. 2. The Tribunal dismissed the original petition under order dated12.9.2001 rejecting the plea of the petitioner that the tooth paste soldby the assessee be treated as drugs and medicines falling under Entry 20-APart C of the First schedule to the Tamil Nadu General Sales Tax Act,1959. It held that the interpretation of the entries was to be on thebasis of the intention of the Legislature in bringing these productsunder Entry 7 of Part E of First Schedule. Consequently, the Tribunal heldthat the petitioner's case could not be accepted to exclude the itemsmanufactured and marketed by the assessee as not falling Entry 7 ofPart-E of the I Schedule. Aggrieved by the order of the Tribunal, thepresent writ petition has been preferred by the assessee. 3. Learned counsel for the petitioner submitted that the toothpaste sold by the petitioner are manufactured under the drug licenceissued by the Food and Drug Authorities of Gujarat and that Thermosealand RAThermoseal are medical preparations and cannot be equated withordinary tooth pastes to fall under Entry 7 Part-E. Placing reliance onthe decision of this Court in V.C.RAMALINGAM AND SONS AND ANOTHER VS.STATE OF TAMIL NADU AND OTHERS (127 STC 382) and the decision of theSupreme Court in PUMA AYURVEDIC HERBAL (P) LTD., VS. COMMISSIONER,CENTRAL EXCISE,NAGPUR (145 STC 200), learned counsel sought for aninterpretaton of the item as medicinal preparation liable to be assessedunder Entry 20 A Part-C . https://hcservices.ecourts.gov.in/hcservices/

4. Heard the learned counsel on either side and perused thematerials on either side. 5. We do not find any justifiable ground to accept the contentionof the petitioner to hold the items in question as medicinal preparationby the mere application of the decision relied on by the assesseepetitioner herein without any factual basis to hold so. In the decisionreported in STATE OF GOA AND OTHERS VS. LEUKOPLAST (INDIA) LTD ( 105 STC318), while dealing with a challenge made as to whether adhesive plaster,surgical wound dressing and crepe bandage could be treated as medicines,the Apex Court held that the question whether the products manufacturedby the assessee could be treated as "drugs and medicines" had to be foundout as to how those products were understood and treated in the market,whether in the ordinary commercial sense, those articles were consideredas drugs and medicines. The question whether the products manufactured bythe assessee could be treated as "drugs or medicines" could not beanswered straight away. Their medical contents, if any, had to beascertained. Their curative function was to be found out. It had tobe decided whether they could be called medicament at all and whether theywere used to cure or alleviate or prevent disease or to restore orpreserve health. These were basically questions of fact which should havebeen agitated before the statutory appellate authority. The Apex Courtheld that there was no reason for the assessee to by-pass the statutoryremedy. The issues raised herein stand on no different footing.Considering the fact that the proceedings challenged before this Courtare at the stage of assessment, the contention now raised before thisCourt merits to be taken before the assessing authority concerned forconsideration on merits. 6. In the light of the decision in STATE OF GOA AND OTHERS VS.LEUKOPLAST (INDIA) LTD. (105 STC 318), we do not find any justification toaccept the plea of the assessee herein. On the other hand, the propercourse would be for the assessee to place its plea with all thesupporting materials before the Assessing Officer so that necessaryfindings could be arrived at as to the entry under which the item shouldbe assessed. Accordingly, we direct the petitioner to appear before theAssessing Officer, the second respondent herein, on 20th December 2007 andplace his objections with all supportive materials to support the pleabased on the decision of this Court in V.C.RAMALINGAM AND SONS ANDANTOEHR VS. STATE OF TAMIL NADU AND OTHERS (127 STC 382) and the decisionof the Supreme Court in PUMA AYURVEDIC HERBAL (P) LTD., VS.COMMISSIONER,CENTRAL EXCISE, NAGPUR (145 STC 200). If any such objection is filed bythe petitioner, the Assessing Authority shall consider the same in thelight of the above decisions relied on by the petitioner and pass ordersaccordingly. If there is any delay on the part of the petitioner infiling the objections on the said date, it is open to the AssessingOfficer to pass necessary orders on merits and complete the proceedings. https://hcservices.ecourts.gov.in/hcservices/ With these observations, all these writ petitions are disposed of.No costs. Sd/Asst.Registrar/true copy/Sub Asst.Registrarkrr/To:1. The Registrar,Tamil Nadu Taxation Special TribunalChennai.2. The Commercial Tax Officer,Vallalarnagar, Assessment Circle,Chennai. 3. The State of Tamil Nadu rep. By its Secretary, Department of CommercialTaxes and Religious EndowementsFort St. George, Chennai.1 cc To Mr.K.J.Chandran, Advocate, SR.71064.1 cc To The Special Government Pleader (Taxes), SR.70648.W.P.No.44482 of 2002 VRK(CO)RVL 26.12.2007