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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)