| Headnote |
Kerala General Sales Tax Act, 1963 – Entry 79, 127 – Tamil Nadu General Sales Tax Act, 1959 – s. 3, Entry 20-(A) of Part C of First Schedule; Entry 1(iii) of Part-F of First Schedule – Drugs and Cosmetics Act, 1940 – s. 3(aaa), 3(b) – Whether medicated talcum powder is medicine or drug, or a cosmetic, or in terms of the statutes in question, medicated talcum powder – In the first set of appeals, the revisional authority was of the view that the order of assessment passed by the assessing authority (levying tax at 8% on ‘Prickly heat powder’) was prejudicial to the interest of revenue by treating it as a medicine and tax at 20% was to be applied as applicable to “Medicated talcum powder” – Kerala High Court concurred with the view adopted by the Revenue – In the second set of appeals, the Madras High Court relied on the decision of the Kerala High Court holding that medicated talcum powder includes prickly heat powder and answered the issue in favour of the Revenue and against the assessee – Before the Supreme Court, the Revenue contended that in the Kerala case, that Nycil prickly heat powder is “medicated talcum powder” since there is separate entry for medicated talcum powder (Entry 127), it has to be classified under Entry 127 of the first schedule to the KGST Act – In the Tamil Nadu case, it is contended that the exclusion of products capable of being used as cosmetics from Entry 20 in Part C, on the one hand, and the inclusion of talcum powder, in Entry 1 of Part F, as cosmetics, read with explanation to Entry 1, is decisive that the proper classification of the product is as a cosmetic – Held: The court has to, as a principle, interpret the concerned statutes, in the light of their plain words, and having regard to their internal guides or aids – In Kerala case, the use of the term “includes” after talcum powder, followed by “medicated talcum powder” in the Court’s opinion can lead to only one inference, which is that the clear legislative intent was that all kinds of talcum powders, which contained medications (irrespective of the proportion, or at any rate, not containing predominant proportions) should necessarily be treated as cosmetics, falling under Entry 127 – The clear legislative intent, of inserting a carefully worded entry, which was a “hybrid” one, i.e. describing an article that contained medicinal ingredients, as well as those used for cosmetics, and yet placing such a creature (“neither beast nor fowl” so to say) in the category of cosmetics, ruled out altogether any interpretive scope of classifying it as a medicinal preparation, or drug or medicine – In the Tamil Case, the TNGST was consciously amended to include talcum powder, whether or not medicated in the specific entry or class of entries, enumerating cosmetics – Hence, like in the Kerala case, the plain meaning of that taxation head or entry had to be given, as there was no ambiguity – Consequently, the findings recorded by the High Courts are justified. Interpretation of Statutes – A salutary rule for fiscal legislation interpretation is that words used in the statute must be given their plain meaning and the court’s function is not to give a strained and unnatural meaning to the provision. |
