Hindustan Unilever Ltd Vs Commercial Taxes Department (Madhya Pradesh High Court)
Madhya Pradesh High Court held that White Petroleum Jelly of IP grade is liable to be classified as a category of drug and medicine under Entry 19-A of Part II, Schedule II of the MP VAT Act. Accordingly, order dated 14.05.2019 quashed.
Facts- The appellant is a reputed public limited company engaged in the business of manufacturing and marketing a range of fast-moving consumer goods (FMCG), including toilet soaps, detergents, hair oils and allied products. The appellant maintains a branch depot at Indore and is duly registered under the MP VAT Act, 2002, the Central Sales Tax Act, 1956 and is also a registered dealer under the M.P. Entry Tax Act, 1976.
The dispute concerning the proper classification of the product led to the passing of separate assessment orders, appellate orders which have been challenged by the appellant in the present two VAT Appeals and the learned MPCTAB has also preferred Tax reference before this Court, all of which involve the core dispute that whether White Petroleum Jelly I.P. is classifiable as a Drug and Medicine or as a Cosmetic / Medicinal Preparation of Cosmetic.
Conclusion- Held that in the VAT Act as well as in Entry Tax there is no such specific entry for White Petroleum Jelly; the Revenue is trying to bring such in the cosmetic and beauty product whereas, under Entry No. 19A, Part II, Schedule II of the MP VAT Act the Drugs and medicines including vaccines, syringes, medicated ointments produced under drug license and light liquid paraffin of IP grade and the White Petroleum Jelly IP having light liquid paraffin of IP grade. Hence, it is manufactured and marketed by the appellant under a valid drug and medicine licence; therefore, we hereby answer the question in favour of the assessee. That a White Petroleum Jelly of IP grade manufactured and sold by appellant under a valid drug licence is liable to be classified as a category of drug and medicine under Entry 19-A of Part II, Schedule II of the MP VAT Act. Hence, the M.P. Commercial Tax Board was not justified in following the decision of the Apex Court in the case of Ponds India Ltd. vs. CCT (supra). Accordingly, the appellant is not liable to pay interest under Section 18(1)(a) of the MP VAT Act.
