Rajesh Balia, J.
1. This revision under Section 86(2) of the Rajasthan Sales Tax Act, 1994 is directed against the order dated June 9, 1997 passed by the Rajasthan Tax Board, Ajmer, whereby the Tax Board has allowed the appeal filed by the respondent-assessee and set aside the order dated April 12, 1993 passed by the Additional Commissioner, Commercial Taxes, Rajasthan, Jaipur.
2. The brief facts leading to this revision are : that the respondent-assessee who is a dealer of I.V. sets [blood donor sets], moved an application under Section 12-A of the Rajasthan Sales Tax Act, 1954 (for short, 'the Act') before the Commissioner, Commercial Taxes, Rajasthan, Jaipur for determination of the following question :
'That the I.V. sets (blood donor sets) made of plastic is whether surgical goods or medicines because the Government of India and Government of Rajasthan has declared the I.V. sets as medicines vide Notification No. X-11014/8/88 DMS/PF a photocopy of said notification is attached in duplicate, moreover the Executive Engineer, Municipal Council has been charged octroi on the I.V. sets of medicines.'
3. The above application was moved with a view to get a declaration whether the sale of I.V. sets is taxable at the rate of 6 per cent under entry 56 of the Schedule prescribing rates of taxes payable on the sale of commodities or are to be taxed at 10 per cent under residuary entry not otherwise specified in the Schedule.
4. The application was forwarded for disposal to the Additional Commissioner, Commercial Taxes, Jaipur. The Additional Commissioner, Commercial Taxes, Jaipur decided the above application vide his order dated April 12, 1993 holding that I.V. sets are not medicines and hence they are liable to be taxed at 10 per cent. He held that I.V. sets are not understood as medicine by the doctors, patients as well as wholesalers and retailers in the commercial parlance as members of the trading community and the definition given in the Drugs and Cosmetics Act, 1940 is not relevant for the purpose of classification of goods to determine the rate of tax applicable. The I.V. sets are not medicines but are required and used for injecting medicines in the body of the patients and they do not by itself cure any disease.
5. Against the above order dated April 12, 1993 passed by the Additional Commissioner, Commercial Taxes, the assessee filed an appeal before the Rajasthan Tax Board, Ajmer. The Rajasthan Tax Board, Ajmer, vide its judgment dated June 9, 1997 allowed the appeal filed by the assessee- respondent holding that in view of the Government circular dated March 17, 1989 whereby disposable hypodermic syringes, disposable hypodermic needles and disposable perfusion sets have been treated as medicines, I.V. sets are medicines and hence, they are liable to tax at 6 per cent. Hence this revision by the Revenue.
6. Mr. Sangeet Lodha, the learned counsel appearing for the Revenue, has contended that while deciding taxability of a particular commodity, the meaning assigned to that commodity in any other Act should not be taken in consideration. He submitted that for determining the meaning or connotation of words describing an article or commodity in relation to the sales tax enactments, the words or expressions must be construed in the sense in which they are commonly understood in the trade and generally speaking, an item in the Schedule must be construed independent of any definition given under any other statute. In support of this contention, he placed reliance on Commissioner of Sales Tax v. Voltas Limited [1968] 22 STC 185 (Bom), Porritts & Spencer (Asia) Ltd. v. State of Haryana [1978] 42 STC 433 (SC) ; (1979) 1 SCC 82 and Associated Agencies v. State of Tamil Nadu [1993] 89 STC 447 (Mad.).
7. He further submits that in the common parlance, medicine is considered to be a substance possessing or reputed to possess curative or remedial properties and which is administered to a patient either for the purpose of curing the disease from which he is suffering whether internally or externally, or as a precautionary measure but in no circumstances, any device by which such drugs or medicines or substances are administered to the ailing person or to a healthy person as a preventive measure can be considered as a medicine and hence, I.V. sets cannot be considered as medicines.
8. In support of his contention, he placed reliance on the dictionary meaning given to the word 'medicine'. Mr. Lodha also drew my attention to a decision of the Gujarat High Court in B. Shah & Co. v. State of Gujarat [1971] 28 STC 5, wherein while considering the question whether Nycil powder is a toilet powder or a medicine, it was observed as under :
'It is clear from the composition of Nycil powder that it is primarily and essentially an article recommended for use to cure a person of certain skin ailments and that it is made of medicinal articles with starch and talc as its basis. The use for which it is recommended by the manufacturers is not for the purpose of grooming a person by beautifying his appearance but for the purpose of relieving a person from certain skin ailments and it is not even styled or advertised as a toilet powder. Having regard to these special attributes and property of Nycil powder as well as to the advertised use for which it is intended, it would be difficult to hold that Nycil powder would or could ordinarily be used for the purpose of grooming a person by beautifying his appearance...........The essential and true character of such an article as a remedial agent for diseases would not be thereby altered and the article in question must, having regard to its character and property, be held not to fall within the ambit of the expression 'toilet articles' as contained in entry 21A of Schedule E of the Bombay Sales Tax Act, 1959.'
9. The learned counsel appearing for the Revenue also placed reliance on a decision of the Punjab High Court in Bharat Motor Company v. Assessing Authority [1968] 22 STC 133 wherein it was held that in the absence of definition of 'tractor' in the Punjab General Sales Tax Act, 1948, it must be construed in its popular sense. The definition of 'tractor' in the Motor Vehicles Act, 1939 cannot be imported into the Punjab General Sales Tax Act, 1948.
10. He next placed reliance on a decision of the Bombay High Court in Commissioner of Sales Tax v. Voltas Limited [1968] 22 STC 185, wherein it has been held that it will not be safe to interpret the entries in the Schedules to the Bombay Sales Tax Act with reference to definitions of words used in different context in other Acts.
11. On the other hand, Mr. S.L. Jain, the learned counsel appearing for the respondent-assessee, urged that the devices which are used for administering medicines required for healing ailment of the patients are also functioning as integral part of the treatment and they must be construed as medicines or drugs. In support of his contention, he has placed reliance on a decision of the Allahabad High Court in Commissioner of Sales Tax, Uttar Pradesh v. Allied Surgical Emporium (Agencies) [1986] 63 STC 331 wherein 'catguts-sutures and sterilized surgical sutures' were held to be drugs for the purpose of levy of sales tax.
12. I have given my thoughtful consideration to the rival submissions made at the Bar and also the material placed before me.
13. It hardly needs elaboration that ordinarily while construing an entry under the Sales Tax Act, the ordinary meaning of the commodity must be construed not in its scientific or technical sense but as understood in common parlance and further while deciding taxability of a particular commodity, the meaning assigned to that commodity in any other Act should not be taken into consideration. However, one thing is to be kept in view while construing an entry under any statute like Sales Tax Act, that the subject of legislation is sales of goods and not the commodity and the paramount consideration is how the traders understand or deals with the commodity in question, and where they deal with the commodity as falling in one category or another is equally relevant consideration in assigning the meaning for the purpose of finding the correct weight of taxation to be applied.
14. In Porritts & Spencer (Asia) Ltd. v. State of Haryana [1978] 42 STC 433 ; (1979) 1 SCC 82, the Supreme Court was considering whether 'dryer felts' manufactured by the assessee and used in paper making machinery fell within the category of 'all varieties of cotton, woollen or silken textiles' specified in item 30 of Schedule 'B' to the Punjab General Sales Tax Act, 1948 so as to be exempt under Section 6 thereof, from sales tax imposed under the Act. The contention of the assessee did lost before the courts below. However, the Supreme Court held :
'Where a word has a scientific or technical meaning and also an ordinary meaning according to common parlance, it is in the latter sense that in a taxing statute the word must be held to have been used, unless contrary intention is clearly expressed by the legislature. 'Textile' means a woven fabric in ordinary parlance. Whatever be the mode of weaving employed and to whatever use the woven fabric may be put to, it would be 'textile', 'Dryer felts' are clearly woven fabrics and are regarded in common parlance according to the sense of ordinary traders and merchants as textile fabrics and, therefore, must be held to fall within the ordinary meaning of the word 'textile' and be exempt from sales tax under the Act.'
15. Thus, it is clear that where a word has a scientific or technical meaning and also an ordinary meaning according to common parlance, it is in the latter sense that in a taxing statute, the word must be held to have been used, unless contrary intention is clearly expressed by the Legislature. The Supreme Court also laid emphasis what commodity is regarded in common parlance means the sense of ordinary traders and merchants.
16. In Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant Singh Charan Singh [1967] 19 STC 469, the Supreme Court was considering the question whether 'charcoal' is included in the word 'coal' specified in entry 1 of Part III of the Second Schedule to the Madhya Pradesh General Sales Tax Act, 1958. In that case, it was contended on behalf of the Revenue that the 'coal' in its technical meaning does not include 'charcoal'. On those facts, the honourable Supreme Court held as under :
'that while interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense.'
17. Thus, it is clear that the honourable Supreme Court again laid emphasis that while interpreting items in statute like the Sales Tax Acts, resort should be had not to the scientific or technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense.
18. In Associated Agencies v. State of Tamil Nadu [1993] 89 STC 447 (Mad.), it has been held that for determining the meaning or connotation of words describing an article or commodity in relation to the sales tax enactments, the words or expressions must be construed in the sense in which they are commonly understood in the trade. Generally speaking, an item in the Schedule must be construed independent of any definition given under any other statute. In that case, the Madras High Court was considering whether the expression 'pesticides and insecticides' does not include 'weedicides and fungicides' or 'Gramoxone' (a brand of weedicide). The assessee claimed exemption on a turnover representing second sales of 'Gramoxone'. The assessing authority disallowed the claim of exemption holding that the commodity 'Gramoxone' comes under 'weedicides' which were liable at 4 per cent multi-point tax. The Appellate Assistant Commissioner agreed with the assessee and held that the commodity 'Gramoxone' falls under entry 66 of the First Schedule to the Act and since the sales were only second sales, the assessee was not liable to pay any tax thereon. However, on further appeal, the Joint Commissioner held that at the relevant point of time, for the assessment year in question, the commodity 'Gramoxone' which falls under 'weedicides and fungicides', did not fall under entry 66 of the First Schedule and that the said commodity was liable at multi-point rate of taxation. The assessee questioned the correctness of the order passed by the Joint Commissioner by preferring an appeal before the Madras High Court. The contention of the assessee before the High Court was that entry 66 of the First Schedule, as it existed at the relevant time, dealt with 'pesticides and insecticides' and the 'Gramoxone' was included in the expression 'pesticides' as it was a species of 'fungicides and weedicides' and since that amendment incorporated by Act No. 7 of 1977 was of a clarificatory nature in respect of the original entry, the Appellate Assistant Commissioner was right in holding that the commodity 'Gramoxone' was covered under entry 66 of the First Schedule. On those facts, it was held as under :
'Sales tax law is intended to tax sales of different commercial commodities and, therefore, each item in the list of the specified items is a taxable item. If the argument of the learned counsel for the appellant were to be accepted that 'fungicides, including weedicides, herbicides and rodenticides', are included in the expression 'pesticides', it would imply that the substitution made in 1977 of entry 66 of the First Schedule was a meaningless formality. Such an intention cannot be attributed to the Legislature. If 'fungicides, herbicides and rodenticides' were included in the expression 'insecticides' or 'pesticides', as canvassed by the learned counsel, one fails to understand the logic of the amendment made in 1977. If the argument on behalf of the assessee were to be accepted, it would almost render the amendment redundant and the courts do not lean in favour of making any provision of a statute redundant..................The commodities covered by the amended entry are wider than those in the original entry and since the effect of the amended entry was not made retrospective, it would be reasonable to hold that it was not the intention of the Legislature to employ the expanded entry for considering the original entry. The expressions used in the entry, both as it originally existed and after its amendment, are commercially and popularly understood and it is fairly well-settled that the words or expressions must be construed in the manner in which they are understood in the trade. No aid can, therefore, be available from the publications of the Indian Standards Institute as to what 'pesticides' are.'
19. I have already observed that the Sales Tax Act deals with the sale of commodity and the sale of such commodity is usually to be construed as it is understood in the common parlance by the trading community and the categorisation of that commodity is to be made in that sense and, therefore, it becomes relevant that as to how the trading community deals with that commodity and considers that commodity to fall in what category.
20. Let us have a look at dictionary meaning of the word 'medicine'. In Webster Comprehensive Dictionary (Encyclopedia Edition), word 'medicine' reads as under :
'Medicine : 1. A substance possessing or reputed to possess, curative or remedial properties ; 2. The healing art ; the science of the preservation of health and of treating disease for the purpose of cure, specifically as distinguished from surgery or obstetrics ;'
The dictionary meaning of term 'medicine' as given in Words and Phrases, (Volume 26A), which reads as under :
'The word 'medicine' is susceptible of distinct meanings : one indicating nothing more than a remedial agent that has the property of curing or mitigating diseases, or is used for that purpose, while the other indicates an art of healing and science which has for its province the treatment of diseases generally. Commonwealth v. Selbert 105 A. 507, 508, 262 pa 345.'
21. Like medicine, the drug in popular sense is used a noun for any substance used in the composition of medicine to cure, diagnose or prevent disease. In more popular sense, it indicates to narcotic substance especially an addictive one ; a poisonous or stupefying substance. As a verb, it has still wider meaning encompassing administration of drug or medicine. Sometimes, the drug is used just as a synonine to the medicines and sometimes it is used as an administration of medicine or drug. Sometimes, it refers to narcotics and other addictive substances. Obviously, none of them can be taken ipso facto to include or exclude any substance or material without reference to the scheme of the statute for the purpose of which the expression is considered.
22. It is relevant to mention here that the dictionary meaning of the word 'medicine' has two distinct meaning operate in different fields. In one sense, it signifies a science or profession and in its other distinctive sense, it signifies a drug indicating nothing more than a remedial agent that has the property of curing or mitigating disease, or is used for the purpose and in its ordinary sense, as applied to human ailments, it means something which is administered either internally or externally in the treatment of disease for the relief of sickness. In this connection, we may refer the following from Corpus Juris Secundum, Volume-57 explaining the term 'medicine' :
'Medicine : A technical and generic term, derived from 'medeor'. It has frequently been defined by eminent lexicograhers of medical words and terms and is susceptible of two distinct meanings.
In one sense, it signifies a science or profession and this meaning is treated in the C.J.S. title Physicians and Surgeons ;
In its other distinctive sense, it signifies a drug indicating nothing more than a remedial agent that has the property of curing or mitigating disease, or is used for the purpose and in its ordinary sense, as applied to human ailments, it means something which is administered either internally or externally in the treatment of disease for the relief of sickness...............
In many jurisdictions, statutes exists regulating the practice of pharmacy by permitting sales of drugs and medicines to be made only by registered or licensed pharmacists, and for the meaning that is attributed to the word 'medicine' as used in statutes of this nature, and for substances that are included or excluded.......................'
23. In this context, one cannot overlook the statutory provision which deals with and controls the trade in the commodity concerned through regulatory measure and directly affects the taxing event namely sale of the commodity or goods in question.
24. It is relevant to mention here that import, manufacture, distribution and sale of drugs and cosmetics are also governed by the provisions of the Drugs and Cosmetics Act, 1940 (for short, 'the Act of 1940'). The expression 'drug' has been defined in Section 3(b) of the Act of 1940 as under :
'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 a drug including empty gelatin capsules ; and
(iv) such device 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 ;'
25. Thus, it is clear that as per the definition of 'drug' contained in the Act of 1940, 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 are the drugs.
26. Therefore, under the Act of 1940 which regulates the sale of drugs and medicines ; the sale, purchases, manufacture and import of I.V. sets is treated as drug, such commodity must be taken to be marketed by the trading community as drug subject to the provisions of the aforesaid Regulatory Act. Hence, it cannot be said that the commodity which is defined as a drug under the Act of 1940 can be sold by any manufacturer or retailer or wholesaler treating it anything other than as a commodity known as a drug. Therefore, it must be held that the sale of I.V. sets is governed by the Act of 1940 treating it as a drug. In this connection, the provisions which require attention are the provisions contained in chapter IV of the Act of 1940. Section 16 of the Act enjoins a duty on the manufacture to maintain the quality of the drug and Section 17 prohibits misbranding of drug and it provides that a drug shall be deemed to be misbranded if it is so coloured, coated, powdered or polished that damage is concealed or if it is made to appear of better or greater therapeutic value than it really is ; or if it is not labelled in the prescribed manner ; or if its label or container or anything accompanying the drug bears any statement, design or device which makes any false claim for the drug of which is false or misleading in any particular. Section 18 of the Act prohibits any person to manufacture and sell certain drugs. It clearly lays down that no person shall himself or by any other person on his behalf manufacture for sale or for distribution, or sell or stock or exhibit or offer for sale any drug which is not of a standard quality, or is misbranded, adulterated or spurious. It prohibits any person from selling or stocking or exhibiting or offering for sale or distribute any drug which has been imported or manufactured in contravention of any of the provisions of this Act or any rule made thereunder. It also prohibits any person from manufacturing for sale or for distribution or to sell or stock or exhibit or offer for sale or distribute any drug except under and in accordance with the conditions of a licence issued for such purpose under this chapter. The aforesaid provisions of the Act of 1940 amply make it clear that a commodity which is defined as a drug and which fall in the definition of drug as provided in the Act is to be manufactured or sold or distributed as a drug by any person subject to constraints provided in the Act and not in any other common parlance meaning such commodity can be traded. If that is so, it stands to reason that if any commodity is treated by the trading community, whether as a manufacturer or wholesaler or retailer, as a drug under the statutory provisions, the same must be treated to be a sale of the commodity falling in that category only.
27. Therefore, applying this principle, I am of the opinion that under Section 3(b) of the Act of 1940, the drug includes such devices, viz., I.V. sets which are 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 and if that has to be treated as a drug for the purpose of sale, manufacture or distribution under the Act of 1940 then it must be held to be a sale of drug for the purposes of the Rajasthan Sales Tax Act also, with which we are concerned in this case.
28. There is no dispute that Section 5 of the Act of 1940 envisages the constitution of a Board to be called as Drugs Technical Advisory Board to advise the Central Government and the State Government on technical matters arising out of the administration of this Act and to carry out other functions assigned to it by. this Act. It is relevant to mention here that in pursuance of the Sub-clause (iv) of Clause (b) of Section 3 of the Drugs and Cosmetics Act, 1940, the Central Government vide its Notification No. GSR 365(E) dated March 1.7, 1989 has specified the disposable hypodermic syringes ; disposable hypodermic needles and disposable perfusion sets as drugs after consultation with the Drugs Technical Advisory Board. In this view of the matter, the Rajasthan Tax Board, Ajmer was right in holding the I.V. sets as drug to fall within the entry governing sale of medicines or drugs.
29. As a result of this, this revision petition fails and is hereby dismissed with no order as to costs.