C.T.O. Vs. DEJ MEDICAL STORES LTD.

JUDGEMENT

(1.) A challenge in this sales tax revision petition has been made by the Commercial Taxes Department, Govt. of Rajasthan (hereinafter 'the Department') to the judgment dated 20.02.2001, passed by the Rajasthan Tax Board, Ajmer allowing the respondent-assessee's second appeal (herienafter 'the assessee') and holding that "Keo Karpin Baby Oil" was classifiable as a medicine and not as a cosmetic at the time relevant to the assessment year under the Rajasthan Sales Tax Act, 1994 and therefore exigible to tax @ 6% ad valorem relevant to the medicines as against the higher rate of 12% ad valorem for cosmetics as claimed by the Department.

(2.) The facts of the case are that the assessee in the course of sale of Keo Karpin Baby Oil in the State of Rajasthan at the relevant time (Assessment Year 1991-92) paid @ 6% tax classifying it to be a medicine / drug. The Department contrarily claimed that Keo Karpin Baby Oil was not a medicine / drug exigible to sales tax @ 6%, but instead a cosmetic on which tax was leviable @ 12% ad valorem. And hence aside of differential of 6% on the tax payable, the assessee was also liable to interest on the tax short-paid. An order dated 06.01.1995 to this effect was passed by the assessing authority. The assessee preferred an appeal there-against. But vide order dated 30.10.1996 the appellate authority confirmed the assessee's liability towards differential tax and interest thereon.

(3.) The assessee thereupon invoked its statutory right to a second appeal before the Tax Board, Ajmer. Relying upon an earlier judgment by the then extant Rajasthan Tax Tribunal, the Tax Board held that Keo Karpin Baby Oil was a medicine / drug and therefore exigible to tax @ 6% ad valorem. The orders of the assessing authority as also the appellate authority holding to the contrary were set aside. The Department is consequentially in revision under Section 86 of the Act of 1994 before this Court against the order dated 20.02.2001, passed by the Rajasthan Tax Board, Ajmer.