By C. B. Thakar Advocate G. G. Goyal Jana K Vaghani Chartered Accountants
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Sales Tax – Rate Of Tax- ‘Halls’ – Ayurvedic Medicine – Not A Confectionary Item, S/s. 17, 28A and Schedule I, Part C, of The Tamil Nadu General Sales Tax Act, 1959.
FACTS
The assessment of the dealer company was completed by treating ‘Halls’ as ayurvedic medicine based on clarification issued by the Commissioner. Later on the Department initiated revision proceedings on the basis that ‘Halls’ is not an ayurvedic preparation and it is only a confectionary taxable at 12%. The dealer filed writ petition before the Madras High Court against impugned notice for revision of assessment.
HELD
The Commissioner of Commercial Taxes has issued clarification that ‘Halls’ is an ayurvedic medicine and assessment is completed on that basis. Further, he had revised assessment on earlier occasion and concluded it and also levied penalty for excess collection of tax. Another assessing authority, by mere change of opinion, cannot propose to revise the assessment treating the said product as confectionary.
Pudina and Nilgiris Thailam, etc. are generally used for ayurvedic preparations and that is why, the Commissioner of Commercial Taxes, Chennai, had clarified that ‘Halls” tablets is taxable at 4%. The extent of medicament used in a particular product and the fact that the use of the medical element in the product was minimum that would not detract that the same being classified as Medicament. It is also not necessary that the said item must be sold under doctor’s prescription and that the availability of the product across the counter in many shops is not relevant.
In view of binding precedents of the circulars, issued by the Commissioner of Commercial Taxes, in favour of the dealer, the High Court set aside the notice for revision of assessment. Accordingly, the High Court allowed writ Petition.
