COMMERCIAL TAXES OFFICER, ANTI-EVASION Vs. CIPLA LTD.

JUDGEMENT

(1.) The present Sales Tax Revisions / References (for short "STRs") were admitted on following question of law:

(2.) Learned counsel for the revenue contends that all the authorities below have erroneously held the product in question, i.e. nicotex/nicogum, as medicine/drugs to be taxed as per Entry No. 43 of Schedule IV to the Rajasthan Value Added Tax, 2003 (for short "RVAT Act"), whereas the product in question would have to be classified and taxed as 'Tobacco and its products'. In support of his contention, learned counsel for the revenue submits that the main ingredient in the product in question is Nicotine, which is extracted from tobacco leaves and which is used as a substitute to smoking cigarettes / chewing tobacco. The admitted purpose of nicotine is to help get rid of the habit of smoking, which is not a disease and therefore the product in question has no medicinal value. The product in question are also sold without any prescription and is readily available in common grocery shops also. Learned counsel for the revenue has further relied on Apex Court order dtd. 19/9/2018 in CTO vs M/s Johnson and Johnson & Ors., wherein the Apex Court had set aside the order of Coordinate Bench of this Court, dtd. 13/1/2016 in S.B. STR No. 3/2013 and other connected matters.

(3.) Per contra, learned counsel for the respondentassessee, at the outset, submits that the Revenue had not discharged its onus in establishing that the product in question would fall under Schedule V/VI to the RVAT Act. Learned counsel for the respondent-assessee submits that addiction to tobacco is a well recognized disease worldwide, the leading treatment of which is Nicotine Replacement Therapy (for short "NRT"). In this regard, learned counsel for the respondent-assessee has placed reliance on 'Tobacco Dependence Treatment Guidelines' issued by Ministry of Health & family Welfare, Government of India and the WHO Model List of Essential Medicines (18th list), first published in April 2013. Learned counsel for the respondent-assessee has also relied upon Apex Court judgment of Muller and Phipps (India) Ltd. vs. The Collector of Central Excise, Bombay-I: (2004) 4 SCC 787 wherein the Apex Court held that once the Drug Controller has held the goods in questions to be drugs, inevitably the products in question must be treated as medicinal preparations. Learned counsel for the respondent-assessee has also highlighted that for the relevant period, the product in question was specifically included at Serial No. 33 of Schedule K to Drugs and Cosmetic Rules, 1945 and a specific license was required to manufacture such medicines/drugs.