IMPORTANT POINT
Dettol can be said to be an item of medicament to be treated as a drug and medicine – Use is a relevant consideration.

JUDGMENT :

M. R. Shah, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 17.12.2008 passed by the High Court of Kerala at Ernakulam in OT Appeal No.6 of 2006 by which the High Court has dismissed the said appeal and has upheld the order passed by the Commissioner with respect to the classification of the goods in question, the assessee has preferred the present appeal.

2. At the outset, it is required to be noted that the issue pertains to the classification of the appellant’s products namely (i) Mosquito Mats, Coils and Vaporizers; and (ii) Mortein Insect Killers; (iii) Harpic Toilet Cleaner and Lizol Floor Cleaners; and (iv) Dettol Antiseptic Liquid for the purposes of Kerala VAT Act, 2003 (hereinafter referred to as “KVAT Act”). It was the case on behalf of the appellant that the products at (i) to (iii) were classifiable under Entry No. 44(5) of the III Schedule to the Kerala VAT Act as being 'pesticides, insecticides' corresponding to HSN Code 3808 and therefore subject to VAT at the rate of 4%. With respect to the product at (iv) hereinabove, it was the case on behalf of the appellant that 'Dettol Antiseptic Liquid' is correctly classifiable under Entry 36(8) (h) (vi) being medicaments corresponding to HSN Code 3004.90 of the III Schedule, and thus also subject to tax at the rate of 4%.

2.1 However, the Commissioner of Commercial Taxes, rejected the contention of the appellant holding that the products (i) Mortein Mosquito Coil, Mat and Liquid Vaporizer is classifiable under Entry 66 of Notification SRO 82/06 dated 21.01.2006 issued under Section 6(1)(d) of the Kerala VAT Act which covers "Mosquito Repellants, electric or electronic mosquito repellants, gadgets and insect repellants, devices and parts and accessories thereof” corresponding to HSN Code 8516 79 20; (ii) Mortein Insect Killer is subject to tax at the rate of 12.5% under the residuary entry i.e. under SL No.103 of the Notification SRO 82/06 on the ground that they are not specifically classifiable under the Second and the Third Schedule; (iii) Harpic Toilet Cleaner and Lizol Floor Cleaner are classifiable under SI No. 27(4) of the said Notification SRO 82/06; and (iv) Dettol Antiseptic Liquid is classifiable under Entry 103 of the said Notification SRO 82/06 i.e. residual entry on the ground that the said product is not in the nature of a medicine having therapeutic or prophylactic properties, but is used only for cleaning purposes.

2.2 The order passed by the Commissioner of Commercial Taxes holding the above was the subject matter of appeal before the High Court. The High Court by the impugned judgment and order has dismissed the said appeal confirming the order passed by the Commissioner of Commercial Taxes. The impugned judgment and order passed by the High Court is the subject matter of the present appeal.

2.3 Before we consider the submissions made on behalf of the respective parties the relevant entries relied upon by the respective parties are required to be referred to which are as under:

(d) Entry 36(8)(h)(vi) of the Third Schedule reads as under: