Aswini Homeo Hair Oil exempted from Sales Tax till 1995-96: Supreme Court [Read Judgment]

A two-judge bench of the Supreme Court has held that the product Aswini Homeo Hair Oil is exempted from the levy of Sales Tax for the periods 1994-95 and 1995-96 as per Entry 37 of Schedule-I to The Andhra Pradesh General Sales Tax Act, 1957.

In the year 2007, the Andhra Pradesh High Court had reversed the decision of the Commissioner and restored the assessment order passed by the jurisdictional Deputy Commissioner accepting the claim(s) of the respondent that the product manufactured by the respondent by the name of ‘Aswini Homeo Hair Oil’ came under Entry 37 of Schedule-I of the Act.

Before the Court, the assessee contended that the hair oil manufactured by them contains ‘Arnica Mount Q, Cantharis Q, Cinchona Q and Pilocarpine Q’ and would, therefore, qualify to be a drug within the meaning of Section 3 of The Drugs and Cosmetics Act, 1940, and if so, would be covered under Entry 37 of Schedule-I of the APGST Act; and not Entry 36 which is for general hair tonics, hair oils or hair lotions, as such.

The High Court held that the respondent had produced sufficient material to show that the product manufactured by the respondent was a medicine and not a cosmetic product.

The bench comprising Justice A M Khanwilkar and Justice Ajay Rastogi held that “the fact that the respondent is using the Homeopathic Pharmacopoeia referred to earlier in manufacturing of the hair oil has not been traversed by the appellant. Neither has the Commissioner dealt with that contention of the respondent nor was such a plea taken before the High Court by the appellant. Considering this, we see no reason to deviate from the conclusion reached by the High Court that the product manufactured by the respondent was rightly assessed at the relevant point of time in the assessment years 1994-1995 and 1995-1996, as covered by Entry 37 of Schedule-I of the APGST Act.”

“We once again make it amply clear that the view taken in these appeals is in the fact situation of this case and confined to the assessment years 1994- 1995 and 1995-1996 only and would not apply or be of any avail to the respondent for the subsequent assessment years, in view of the amendment effected in the APGST Act,” the bench added.