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IN THE COURT OF COMMISSIONER

DEPARTMENT OF TRADE & TAXES

GOVT. OF NCT OF DELHI

VYAPAR BHAVAN, NEW DELHI

No: 253/CDVAT/2009/15

Dated: 14.01.2010

M/s Godrej Consumer Products Ltd.

4th

Floor, Delite Building,

4/1 Asaf Ali Road, New Delhi - 110002

ORDER

Present for the Applicant : Sh. Swaranjit Singh, Advocate

Present for the Department : Shri T.C. Sharma, DR.

The above named applicant dealer has filed this application on 23.09.2009

for determination of the under mentioned question u/s 84 of the Delhi Value Added

Tax Act, 2004.

What is the rate of tax on the item NUPUR 100% NATURAL MEHENDI

sold under the brand name of GODREJ?

2. The application has been made in the prescribed format DVAT-42 and thefee of Rs. 500/- paid through bank draft No. 139791 dated 22.09.2009 of HDFC

Bank, Kailash Nagar, Delhi.

3. The case of the applicant is that the product NUPUR 100% NATURAL

MEHENDI is sold in pouches of different weight. The petitioner mentions that it is

100% Natural Mehendi and no synthetic dyes or colors or any chemical has beenmixed in it. However, to enhance the quality and effects; Negligible quantities of

nine Ayurvedic herbs namely; amla, brahmi, bhringraj, jaswant, aloe Vera, methiseeds, jatamansi & shikakai are mixed in it. The total volume of all the (herbs) mixedis less then 2% or about 1.46% to be precise.

The petitioner is charging DVAT @ 4% presuming that the item in question

is noting but pisi mehendi and is covered by entry 81 of third schedule of the Delhi

Value Added Tax, 2004, which reads as:-

kirana items namely ararote, singhara, kuttu & their atta, kala namak,sendha namak, heeng, aam papar, mushrum, khumba and guchchi [***], goley ka

burada [***], til, rai, prosdana, magaj of all kind, mungafali dana, sabu dana, roli,

mehendi patti, pisi mehendi, keser, dry fruits.

The Counsel for the applicant has stated that the product is marketed and

used as mehendi and it is mehendi even in common parlance. The Counsel for

the dealer, at the time of hearing on 18.11.2009 filed photocopy of a ruling given bythe Honble Allahabad High Court in the case of Commissioner of Sales Tax U.P.

Lucknow vs. Neera Drinks 115 STC 0637 (1999) wherein it has been held thatadding of Dry fruits to milk and then putting them in bottles with caps will not

change the nature of the product. It was held that the commodity sold is basically

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milk. On the basis of the said ruling, the Counsel for the dealer stressed that mixing

of 9 herbs in mehendi would not affect its taxability.

4. The DR for the Revenue has opposed the plea of the applicant stating that

entry No. 81 (pisi Mehendi) of the third schedule appended to the DVAT Act, 2004

is very specific and no scope has been left for interpretation/common parlance and

the contents of the case of the Hon. High Court of Allahabad are different. DR

further stated that the mehendi mixed with 9 other herbs cannot be pisi Mehendi so

as to fall under the entry No. 81 of the IIIrd schedule appended to the DVAT Act, to

attract tax at the rate of 4%. The DR referred to the case of CCE vs Sharma chemical

works, 2003 (154) ELT 328 wherein Court was considering whether Banphool oil

could be classified as medicament. The product has 98% Till oil and 2% camphor,

Amla and chandan (sandalwood). It was found that all the ingredients of the hair oil

mentioned in ayurveds textbooks are there and therefore the product was liable to be

classified as medicament and not simple Hair oil. The DR referring to the above case

stated that mixing or even 2% might change the classification of the goods.

5. I have heard the arguments put up from both the sides as well as gone

through the case. Entry No. 81 of the third schedule appended to the DVAT Act,

2004 has also been examined.

It is seen that the language of Entry No. 81 is unambiguous and the intention

of the legislature by putting mehandi patti and pisi mehendi side by side in the

said entry are to be taken in the absolute sense and as such the entry is not left to

common parlance test. Therefore on giving deep though and anxious consideration to

the issue at hand this Court finds itself of the opinion that the product sold by the

dealer is not merely pisi Mehandi falling under entry No. 81 of the third schedule

appended to the DVAT Act, 2004, but is much more than that. In fact, it is a general

unscheduled and unclassified goods attracting tax at the rate of 12.5% under section

4(1)(c) of the DVAT Act 2004. It is determined accordingly.

(Jalaj Shrivastava)Commissioner (T&T)

Copy for information and necessary action to:

1. The Applicant.

2. The Addl. Commissioner (L&J), Department of Trade & Taxes, GNCTD, N.

Delhi.

3. The President, Sales Tax Bar Association, Department of Trade & Taxes,

GNCTD, N. Delhi.

4. The Value Added Tax Officer, Policy Branch, Department of Trade & Taxes,

GNCTD, New Delhi.

5. Guard File.

(Jalaj Shrivastava)Commissioner (T&T)