JUDGMENT :

S. RAVINDRA BHAT, J.

1. The issue which this court has to deal with had placed the courts in a prickly pickle, on several occasions-whether medicated talcum powder is medicine or drug, or a cosmetic, or in terms of the statutes in question, medicated talcum powder? The present appeals, by special leave, concern two sets of appeals: one, from the State of Kerala and the other from the State of Tamil Nadu. The Kerala High Court, by its judgment¹[Dated 29 September 2008 in S.T. Rev. Nos. 164/2007 and 172/2008] rejected the revisions filed by the appellant/assessee (hereafter “Heinz”) aggrieved by the Kerela Sales Tax Appellate Tribunal’s orders holding that its product “Nycil Prickly Heat Powder” was classifiable not under Entry 79 of the First Schedule to Kerala General Sales Tax Act, 1963 (hereafter “KGST Act”) [as “medicine” but as “Medicated Talcum Powder”].

2. In the second set of appeals, M/s Glaxo Smithkline Pharmaceuticals Ltd (“GSK” hereafter) is aggrieved by the judgment of the Madras High Court²[By judgment dated 01.03.2012, in Tax Case (Revision) Nos. 742/2006 and 301/2011] where the court rejected its contention that the prickly heat powder was “medicinal formulation or preparation ready for use internally or externally for treatment or mitigation or prevention of diseases or disorders in human being or animals” [under Entry 20-(A) of Part C of First Schedule to the Tamil Nadu General Sales Tax Act, 1959-hereafter “TNGST Act”] and held it to be toilet powder [under Entry 1(iii) of Part-F of First Schedule of the TNGST Act]. The High Court so held because the Explanation to the said entry stated that:

“Any of the items listed above even if medicated or as defined in Section 3 of the Drugs and Cosmetics Act, 1940 (Central Act XXIII of 1940) or manufactured on the license issued under the said Act will fall under this item.”

I

3. Heinz’s appeal from the Kerala High Court is concerned with assessment years 1999-2000 and 2000-2001. For the assessment year 1999-2000, Heinz filed its annual return which was accepted by the assessing officer; the tax payable on the taxable turnover was 8%, and the treatment on the sale of Nycil prickly heat powder was accepted to be an item falling under Entry 79 of the First Schedule to KGST Act, by order dated 18-11-2005. The revisional authority was of the view that the order of assessment passed by the assessing authority was prejudicial to the interest of the revenue; it initiated proceedings under Section 35 of the KGST Act, proposing to set aside the assessment of the assessing authority on the premise that levy of tax at 8% on ‘Prickly heat powder’ by treating it as medicine by the assessing authority was prejudicial to the interest of the revenue and the rate of tax at 20% was to be applied as applicable to “Medicated Talcum Powder”. Heinz objected to this. However, the revisional authority by order dated 16-2-2006 set aside the assessment order for the assessment year 1999-2000 and remanded the matter to the assessing authority to pass fresh assessment order by levying tax at 20%. Aggrieved, Heinz carried the matter before the Appellate Tribunal, which affirmed the revisional order and rejected its appeal.³[Order dated 14.11.2006 in IA No 311/2006] The High Court, on further revision, concurred with the classification adopted by the revenue.

4. The Kerala High Court noticed the judgment of this court Puma Ayurvedic Herbal Pvt Ltd v Collector of Central Excise, (2006) 2 SCR 1120 (hereafter “Puma Ayurvedic Herbal”); Hamdard (Wakf) Laboratories v. Deputy Commissioner, 2007 (5) SCR 873 (hereafter “Hamdard (Wakf) Laboratories”); Ponds India Ltd. v. Commissioner of Trade Tax, 2008 (9) SCR 496 (hereafter “Ponds India”); Muller & Phipps (India) Ltd v. Collector of Central Excise, 2004 Supp (2) SCR 39 (hereafter “Muller & Phillips (India) Ltd”) and several other decisions cited by