IMPORTANT POINT
The classification of products for tax purposes must reflect their intrinsic properties and intended use, with the burden of proof resting on the party challenging established classifications.

JUDGMENT :

SHEKHAR B. SARAF, J.

1. The instant revision petitions have been preferred by The Commissioner, Commercial Tax (hereinafter referred to as the ‘Revisionist’) under Section 58 of the Uttar Pradesh Value Added Tax, 2008 (hereinafter referred to as ‘the Act’) against the orders dated June 8, 2018, October 8, 2018, October 8, 2018, July 17, 2020, November 1, 2022 and April 28, 2023, passed by the Commercial Tax Tribunal, Uttar Pradesh Lucknow (hereinafter referred to as the ‘Tribunal’). All the revision petitions involve the common question of law as to whether, under the facts and circumstances of the case, the Commercial Tax Tribunal was legally justified in holding that Boro-Plus Antiseptic Cream (hereinafter referred to as the ‘BPAC’) is a medicated ointment and covered under entry no. 41 of Schedule II Part (A).

2. As the issue involved in all the revision petitions is common, the said petitions are being decided by a common order.

3. The factual matrix in all the revision applications is also similar. Accordingly, I have outlined the factual matrix of only one case (STRE No. 274 of 2018) below:

(a) The instant revision petition pertains to the rate of tax to be levied on the sale of BPAC.

(b) The Assessing Authority in the instant case had levied tax on BPAC at the rate of 14% after categorising it as an ‘unclassified item’.

(c) Being aggrieved by the aforesaid assessment order passed by the Assessing Authority, M/s Emami Ltd. (hereinafter referred to as the ‘Respondent’) preferred an appeal before the First Appellate Authority which was dismissed vide order dated July 26, 2016.

(d) The Respondent then filed an appeal before the Tribunal which was allowed vide order dated June 8, 2018. The Tribunal held that BPAC falls within the category of ‘medicated ointment’ and hence is liable to be taxed at the rate of 5% under the heading ‘drugs and medicines’ in Entry 41 Schedule II.

(e) Hence, the instant revision petition has been preferred by the Revisionist against the order dated June 8, 2018, passed by the Tribunal.

CONTENTIONS BY THE REVISIONIST

4. Learned counsel appearing on behalf of the Revisionist has made the following submissions:

(a) BPAC has been sold by the Respondent for a long time, and prior to 2018, it has always been assessed as a cosmetic by this Court. Reliance is placed upon the judgments of this Court in M/s. Balaji Agency v. Commissioner of Sales Tax, Uttar Pradesh 1994 (19) STJ 150, M/s. Paras Pharmaceuticals Limited v. Commissioner, Trade Tax, Lucknow, 2007 (33) NTN 313 and Commissioner Commercial Taxes Uttar Pradesh v. Singhal Bros. Hathras, 2006 (43) STR 579.

(b) The instant matter relates to the assessment year 2012-13. With effect from October 11, 2012, antiseptic cream has been excluded from the entry of ‘drug and medicines’ in Entry 41 Schedule II. Therefore, it is liable to be classified and taxed as an ‘unclassified item’.

(c) This Court on a previous occasion has held that BPAC is a medicament. The commodity is being sold by the Respondent as an antiseptic cream and the legislature has excluded antiseptic cream from the category of ‘drugs and medicines’.

(d) The Hon’ble Supreme Court in Godrej Sara Lee Ltd. v. Assistant Commissioner (CT) INT LTU Secunderabad Division, Hyderabad and Anr. 2017 (106) VST 97 has held that the goods referred to in an ‘exclusion clause’ are to be excluded from the ambit of that entry. Furthermore, the Hon’ble Supreme Court in Commissioner of Central Excise, Nagpur v. Sri Baidyanath Ayurved Bhawan Ltd. 2009 (12) SCC 419, has held that a specific entry must prevail over a general entry.

(e) In the instant case, BPAC has been specifically excluded from Entry No. 41 and hence it is liable to be taxed as an ‘unclassified item’.

(f) Efforts of the Respondent are to reduce the rate of tax by arguing that BPAC is to be classified as a ‘medicated ointment’. However, the Respondent itself sells BPAC as an antiseptic cream and advertises the same on electronic media as an antiseptic cr