R. K. Patra, J.
1. The short question that arises for consideration in these writ petitions is whether sale of 'Lal Dantmanjan' (Red Tooth Powder) is to be taxed under item No. 37 or under residual item 105. These cases have a chequered career.
2. The above three matters being analogous and as the question involved is the same, they were heard together and are disposed of by this common judgment.
3. The petitioner is a limited company registered under the Companies Act, 1956 having its registered office at New Delhi and administrative offices at different places all over India. The petitioner manufactures Ayurvedic medicines, pharmaceutical medicines and medicated toilet goods and effects sale of such products at different branches including its branches in Orissa. It also receives those products from different manufacturing units by way of branch transfer of stock on the strength of declaration Form-F. It has O.S.T. Registration Certificate No. CU II 4538.
4. O.J.C. No. 11356 of 1997, 11357 of 1997 and O.J.C. No. 11358 of 1997 relate respectively to the assessment years 1991-92, 1992-93 and 1990-91. For the sake of convenience, we may refer to the facts in O.J.C. No. 11356 of 1997.
For the assessment year 1991-92, the Sales Tax Officer made an assessment under Section 12(4) of the Orissa Sales Tax Act, 1947 (hereinafter referred to as 'the Act') at Annexure-1. The assessing officer accepted the plea of the petitioner that Lal Dantmanjan being drug, sales tax at the rate of 4% as provided in item No. 37 of the List of Goods Liable to sales tax was chargeable-instead of 12% as provided in residual item 105. The petitioner filed appeal before the Assistant Commissioner of Sales Tax with regard to other points but without any success as is evident from the appellate order dated 2.7.1994 (Annexure-2). Thereafter the Sales Tax Officer reopened the matter under Section 12(8) of the Act and passed order dated 28.12.1993 (Annexure-3) holding that Lal Dantmanjan is exigible to tax at the rate of 12% as per residual item 105. Being aggrieved by the similar assessment orders for the years 1990-91, 1991-1992 and 1992-93, the petitioner filed three writ petitions in this Court (O.J.C. Nos. 2068, 2204 and 2205 of 1994). A Bench of this Court by judgment dated 12.1.1995 (1997) 104 S.T.C. 198 observed as follows :
'...The question whether product with which we are concerned is covered by section 3(b) of the Drugs Act was not under consideration of the apex Court; even incidentally, Another interesting feature is that the assessing officer has stated that prior to April 21, 1993 product cannot be treated to be an ayurvedic medicine. In other words, he accepted that product is ayurvedic medicine, but prior to amendment effective from April 21, 1993, it is not covered by entry 37 of list of taxable goods. The nature of user on a particular product and its principal usage have to be factually adjudicated. The effect of licence is being required to be taken under another statute also throws light on the nature of the product, and is a relevant factor.'
Accordingly, the order of assessment in each case was set aside and the assessing officer was directed to re-do the assessment keeping in view the observation made in the said judgment. After the remand, the matter was re-heard and the Sales Tax Officer by order dated 31.3.1995 (Annexure-5) accepted the stand of the petitioner that Lal Dantamanjan being an Ayurvedic medicine is taxable at the rate of a 4%. Thereafter, a suo motu revision under Section 23(4)(a) of the Act read with rule 80 of the Orissa Sales Tax Rules, 1947 was initiated by the Assistant Commissioner of Sales Tax. By order dated 20.12.1995 (Annexure-8), the Assistant Commissioner held that the petitioner failed to produce any evidence to the effect that Lal Dantamanjan has been manufactured in accordance with the prescription of the authoritative book of Schedule-I of the Drugs and Cosmetics Act, 1940 and, therefore, the same is liable to be taxed under the residual item 105. Being aggrieved by the said order, the petitioner filed writ petition bearing O.J.C. No. 732 of 1996 in this Court. A Bench of this Court by order dated 17.4.1996 (Annexure-9) set aside the aforesaid order of the Assistant Commissioner of Sales Tax and remitted the matter to the said revisional authority for re-disposal according to law. After the matter was thus remanded, the Assistant Commissioner of Sales Tax by order dated 4.6.1996 (Annexure-10) passed fresh order confirming his previous opinion that Lal Dantamanjan is exigible to tax at the rate of 12% under the residual item. Against the said order of the Assistant Commissioner, the petitioner filed appeal before the Commissioner of Commercial Taxes who by order dated 12.5.1997 (Annexure-11) upheld the conclusion of the Assistant Commissioner holding that Lal. Dantamanjan is a tooth powder and is a toiletary product and not an Ayurvedic medicine and accordingly it has to be taxed under the residual item.
5. Item 37 of the List of Taxable Goods reads as follows :
'37.Drugs as defined in Clause (b) of Section 3 of the 'Drugs and Cosmetic Act, 1940, and Ayurvedic, Homoeopathic anD Unani Medicines.'Six percent
Residual item 105 reads as follows :
'105.All other goodsTwelve percent'.
6. In order to bring Lal Dantamanjan within item 37, the petitioner has to establish that it (Lal Dantamanjan) is a drug as defined in Clause (b) of Section 3 of the Drugs and Cosmetic Act, 1940. It may be noted that the expression 'and Ayurvedic, Homoeopathic and Unani Medicines' mentioned in item 37 was inserted by notification No. 18675-CTA-57/93 dated 19.4.1993. The cases at hand being prior to 1992-1993, we need not refer to that part of item 37.
7. Let us, therefore, read the definition of 'drug' as mentioned in Clause (b) of Section 3 of the Drugs and Cosmetic Act, 1940. We quote the same hereunder :
'(b) 'drug' includes :
(i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings or animals, including preparations applied on human body for the purpose of repelling insects like mosquitoes.
(ii) such substances (other than food) intended to affect the structure or any function of the human body or intended to be used for the destruction of vermin or insects which cause disease in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette.
(iii) all substances intended for use as components of drug including empty gelatin capsules; and
(iv) such devices intended for internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette, after consultation with the Board.'
We may at this stage refer to Section 3(a) of the Drugs and Cosmetics Act, 1940 which defines 'Ayurvedic, Siddha or Unani drug'. The fact that the Statute contains two definitions, one for Ayurvedic, Siddha or Unani drug (vide Section 3(a)) and 'drug' (vide Section 3(b)) is an indication that they are mutually exclusive. As we are concerned with the definition of 'drug' as mentioned in Section 3(b), we have to see whether Lal Dantamanjan fits in with the said definition. This Court in its earlier judgment (supra) had observed that the word 'medicine' signifies a drug indicating nothing more than a remedial agent that has the property of curing or mitigating diseases or is used for that purpose. The Assistant Commissipner of Sales Tax as well as the Commissioner in their orders have observed that Lal Dantamanjan had not been prepared as per the prescription of the authoritative book and it is not prescribed for any specific tood disease. The Assistant Commissioner has also further observed as follows :
'...Besides, it is written on the label pasted on the containers of the Lal Dantamanjan that it is meant for healthy gum and bad breath without mentioning any disease for which it is to be applied. Lal Dantamanjan is primarily used for cleansing the teeth and it is under usage is like tooth paste or tooth powder. ...It is sold in betel shop, stationary shop and grocery shop like tooth paste and powder by persons without having drug licence and sold without prescription of Ayurvedic practitioners against any specific tooth disease.'
8. The above observation made by the Assistant Commissioner cannot be found fault with. In view of what has been stated above, we have no hesitation to hold that Lal Dantamanjan is not a drug as defined in Section 3 (b) of the Drugs and Cosmetic Act, 1940 and, therefore, the same is exigible to sales tax under residual item 105.
9. For the reasons aforesaid, we do not find any merit in these writ petitions which are accordingly dismissed.
Ch. P.K. Misra, J.
10. I agree.