Kerala High Court
M/S. The Himalaya Drug Company vs The State Of Kerala on 16 March, 2020
Author: Anu Sivaraman
Bench: C.K.Abdul Rehim, Anu Sivaraman
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM
&
THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN
MONDAY, THE 16TH DAY OF MARCH 2020 / 26TH PHALGUNA, 1941
OT.Appeal.No.1 OF 2018
AGAINST THE ORDER/JUDGMENT IN OTHERS 713/2017 DATED 19-
10-2017 OF COMMISSIONER OF COMMERCIAL TAXES, TRIVANDRUM
APPELLANT/S:
M/S. THE HIMALAYA DRUG COMPANY
27/2164,ANANTHURUTHYCHIRA ROAD,KASTHURBA
NAGAR,KADANTHARA,KOCHI-682020.
BY ADV. SMT.K.LATHA
RESPONDENT/S:
THE STATE OF KERALA
REPRESENTED BY THE AUTHORITY FOR
CLARIFICATION U/S 94OF THE KVAT ACT
2003,DEPARTMENT OF COMMERCIAL
TAXES,SECRETARIATE THIRUVANANTHAPURAM-695
001.
R1 BY GOVERNMENT PLEADER
OTHER PRESENT:
SR.GP- SRI MOHAMMED RAFIQ
THIS OTHER TAX APPEAL HAVING BEEN FINALLY HEARD ON
07-11-2019, ALONG WITH WP(C).6388/2018(W),
WP(C).6390/2018(W), THE COURT ON 16-03-2020 DELIVERED THE
FOLLOWING:
O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018
& 6390 of 2018
..2..
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM
&
THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN
MONDAY, THE 16TH DAY OF MARCH 2020 / 26TH PHALGUNA, 1941
WP(C).No.6388 OF 2018
PETITIONER/S:
M/S THE HIMALAYA DRUG COMPANY
27/2164, ANANTHURUTHYCHIRA, ROAD, KASTHURBA
NAGAR,KADAVANTHARA, KOCHI - 682 020
REPRESENTED BYIT'S MANAGER MR.G.MANIKANTAN.
BY ADVS.
SMT.K.LATHA
SRI.JOSEPH KODIANTHARA (SR.)
RESPONDENT/S:
1 THE STATE OF KERALA
REPRESENTED BY THE AUTHORITY FOR CLARIFICATION
UNDER SECTION 94 OF THE KVAT ACT
2003,DEPARTMENT OF COMMERCIAL TAXES,
THIRUVANANTHAPURAM-695002.
2 THE INTELLIGENCE OFFICER
RAPID ACTION 2, OFFICE OF THE DEPUTY
COMMISSIONER (INT),COMMERCIAL TAXES, ERNAKULAM
- 682 019.
3 THE COMMISSIONER
DEPARTMENT OF COMMERCIAL
TAXES,THIRUVANANTHAPURAM - 695 002.
O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018
& 6390 of 2018
..3..
4 THE INSPECTING ASSISTANT COMMISSIONER
COMMERCIAL TAXES, KAKKANAD, ERNAKULAM - 682
030.
SR.GP- SRI MOHAMMED RAFIQ
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 07-11-2019, ALONG WITH OT.Appeal.1/2018,
WP(C).6390/2018(W), THE COURT ON 16-03-2020 DELIVERED THE
FOLLOWING:
O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018
& 6390 of 2018
..4..
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM
&
THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN
MONDAY, THE 16TH DAY OF MARCH 2020 / 26TH PHALGUNA, 1941
WP(C).No.6390 OF 2018
PETITIONER/S:
M/S. THE HIMALAYA DRUG COMPANY
27/2164, ANANTHURUTHYCHIRA ROAD, KASTHURBA
NAGAR, KADAVANTHARA, KOCHI-682020, REPRESENTED
BY IT'S REGIONAL FINANCE MANAGER MR.PRASANNA
U.S.
BY ADVS.
SMT.K.LATHA
SRI.JOSEPH KODIANTHARA (SR.)
RESPONDENT/S:
1 STATE OF KERALA
REPRESENTED BY THE AUTHORITY FOR CLARIFICATION
UNDER SECTION 94 OF THE KVAT ACT 2003,
DEPARTMENT OF COMMERCIAL TAXES,
THIRUVANANTHAPURAM-695002.
2 THE ASSISTANT COMMISSIONER
O/O.THE ASSISTANT COMMISSIONER (ASSESSMENT),
COMMERCIAL TAXES, SPECIAL CIRCLE-1, ERNAKULAM-
682019.
3 THE COMMISSIONER DEPARTMENT OF COMMERCIAL
TAXES
THIRUVANANTHAPURAM-695002.
O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018
& 6390 of 2018
..5..
4 THE INSPECTING ASSISTANT COMMISSIONER
COMMERCIAL TAXES
KAKKANAD, ERNAKULAM-682030.
SR.GP- SRI MOHAMMED RAFIQ
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 07-11-2019, ALONG WITH OT.Appeal.1/2018,
WP(C).6388/2018(W), THE COURT ON 16-03-2020 DELIVERED THE
FOLLOWING:
O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018
& 6390 of 2018
..6..
C.K.ABDUL REHIM & ANU SIVARAMAN, J.J.
-------------------------------------------
O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018
---------------------------------------------
Dated this the 16th day of March, 2020
JUDGMENT
ANU SIVARAMAN,J.
The above 'Other Tax Appeal' is preferred challenging Annexure A4 order issued by the Authority for Clarification under Section 94 of the Kerala Value Added Tax Act, 2003. W.P.(C) No.6388 of 2018 is filed challenging Ext.P2 penalty order issued in respect of the goods with respect to to which the clarification was sought, pursuant to an inspection and seizure made at the check post. W.P.(C) No.6390 of 2018 challenges Ext.P2 pre assessment notice issued in respect of the assessment year 2014-15 in respect of the very same goods.
2. A common question arises for consideration in these cases. The appellant, who is a manufacturer of ayurvedic products, had approached the 'Authority for Clarification' seeking clarification as to whether the specified products i.e., 1. Ayurvedic Baby Soap 2. Ayurvedic Tooth Paste 3.Ayurvedic Mouth Wash 4. Baby gift pack and 5. Ayurvedic Baby Powder manufactured by the O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..7..
appellant under the drug licence granted under the Drugs and Cosmetics Act, 1940 are eligible for concessional rate of tax in terms of the newly introduced Clause 27 under Entry No.36 of the IIIrd schedule to the KVAT Act, 2003. It was contended that, Entry 36 of the 3rd schedule was with regard to drugs, medicines and bulk drugs including Ayurvedic, Unani and Homeopathic medicine. It is stated that the products enumerated under Entry 36 are specific and had HSN codes indicated against each of them. Medicaments of the Ayurvedic system, with specific eight digit Harmonized System of Nomenclature (HSN for short) Codes were included in Entry 36. A new sub entry, that is Sub Entry 27, was inserted in Entry 36 of the IIIrd schedule by the Kerala Finance Act, 2012. The said sub entry read as follows:-
(27)Ayurvedic cosmetics containing added medicaments manufactured under drug licence granted under the Drugs and Cosmetics Act, 1940 (Central Act 23 of 1940).
[Note:-This entry shall be deemed to have come into force on the 13th day of November, 2009 Provided that the tax, if any, collected during the period from the 13th day of November, 2009 to the 31st day of March, 2012 shall not be refunded.] No HSN code was attached to the said sub entry.
3. Learned counsel for the appellant would contend that O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..8..
since the sub entry itself specifically referred to Ayurvedic Cosmetics containing added medicaments and manufactured under a drug licence granted under the Drugs and Cosmetics Act, 1940, all Ayurvedic products manufactured under a Drug Licence so granted, which contained added medicaments are liable to be included under the said Sub Entry and should be granted concessional rate of tax. Specific contention of the petitioner is that, cosmetics are a genre of which toiletries are a species and that as such, all toiletries and consumer articles produced by the appellant company under a valid licence under the Drugs and Cosmetics Act, which are not drugs per se would come within the definition of cosmetics and would be entitled to concessional rate of tax. Placing reliance on the definition of Cosmetics in the Drugs and Cosmetics Act, it is contended that, all the products of the appellant for which clarification was sought under Section 94 answered the definition of 'Cosmetics' as contained in the Drugs and Cosmetics Act, and are therefore eligible for concessional rate. Section 3(aaa) of the Drugs and Cosmetics Act defines cosmetic as follows:-
as any article intended to be rubbed, poured, sprinkled or sprayed on or introduced into or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness or altering the appearance and includes any O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..9..
article intended for used as a component of cosmetic.
4. It is submitted that a Division Bench of this Court in Proctor and Gamble Hygiene and Health Care Ltd. v. Commissioner of Commercial Taxes, Tvm [2010(3) KHC 129] held after examining the statute and precedents of law on the point, that the question whether a product is a medicinal product or a cosmetic or confectionery is to be decided on the basis of the use to which the product is put. This Court had held that, fact that the items are sold over the counter in the retails shops and are available freely cannot lead to a conclusion that they are not ayurvedic medicines. It is stated that, the said decision had been rendered specifically taking note of Entry 36 and Rule 23 of the Rules of Interpretation.
5. The learned Senior counsel appearing for the appellant would place reliance on the decision of this Court in Kilban Foods India (P) Ltd., Calicut v. Commissioner, Commercial Taxes, Tvm [2014 KHC 125] to contend that, where two interpretations are possible, the interpretation which is favourable to the assesee should be accepted. It is contended that, the intention of the legislature is to confer a concessional rate of tax and a benefit on the manufacturers of a particular type of commodity and that the Authority for Clarification went wrong in losing sight of this aspect O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..10..
of the matter.
6. It is further contended that the definition of Cosmetics in the Drugs and Cosmetics Act originally contained the words "but does not include soap", at the end of the definition, which was omitted by Act 68 of 1982 with effect from 01.02.1983. It is therefore contended that the definition of Cosmetic, which is presently obtained in the Act, takes in 'soap' as well.
7. Relying on a decision reported in Maharashtra S.B.O.S. and H.S. Educational and Another v. Paritosh [AIR 1984 SC 1543], learned Senior Counsel would contend that, where under a specific Section or Rule, a particular subject receives special treatment, such special provision will exclude applicability of any general provision which might otherwise cover the said topic. The contention therefore is that, though "soaps and other products containing added medicaments" are excluded from the scope of entry 36 by Rule 23 of the Rules of interpretation, the subsequent introduction of Sub Entry 27 to Entry 36 would have the effect of including Ayurvedic Soaps with added medicaments and manufactured under a Drug Licence issued under the Drugs and Cosmetics Act from the purview of goods taxable at the default rate and would render such articles liable for tax only at the concessional O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..11..
rate. It is contended that, the manufacture of the goods in question under a licence issued under the Drugs and Cosmetics Act, is the deciding factor, since the Sub Entry specifically provides for the same.
8. Learned senior counsel would also rely on the decision of the High Court of Calcutta in Asiatic Oxygen Ltd v. Assistant Collector of Customs [1992(57) E.L.T. 563 (Cal.)] and of the Apex Court in Vadilal Chemicals Ltd v. State of Andhra Pradesh [2005(192) E.L.T. 33 SC] to contend that, where the object of the specific provision is to promote a particular sector, the courts should construe the provisions in a manner which will promote the object of the legislation, even if that requires a wider interpretation to be granted to the specific language used.
9. The learned Senior counsel also places reliance on the decisions of the Apex Court in Commissioner of Central Excise, Calcutta v. Sharma Chemical Works [2003 (154) E.L.T.328(S.C.)] to contend that, nature of the commodity is to be decided by taking note of the specific wordings contained in the Entry in question and taking note of the use the commodity to which it is put to. The Apex Court held that, the mere fact that a product is sold across the counters and not under prescription, does O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..12..
not by itself lead to the conclusion that it is not a medicament. It was further held that, even if the formula is not as per the Ayurvedic Text Books a medicament can also be under a patented or a proprietary formula and the main criteria for determining the classification is normally the use it is put to by consumers.
10. The learned Senior Government Pleader, on the other hand, submits that the provisions of a fiscal statute are liable to be construed strictly. It is stated that Entry 27 provides for the inclusion of 'Ayurvedic Cosmetics' containing added medicaments and manufactured under a Drug Licence in Entry 36, for the purpose of grant of concessional rate of tax. It is stated that, to meet the requirements of Sub Entry 27, the product would initially have to be an "Ayurvedic Cosmetic". It is contended that, in the absence of any definition of the word Cosmetic in the statute in question, there can be no importing of the definition from another statute under the regulatory regime, which is bound to be wide in nature than a fiscal statute which intends to grant the benefit to specific products. Relying on the decision of the Apex Court in Commissioner of Central Excise v. Shree Baidyanath Ayurved Bhavan Ltd. [(2009) 12 SCC 419], Medley Pharmaceuticals Ltd v. Commissioner of Central Excise and Customs, Daman O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..13..
[(2011) 2 SCC 601] and Shree Baidyanath Ayurved Bhavan Ltd. v. Commissioner of Central Excise, Nagpur [(1996) 9 SCC 402], it is contended that the Apex Court has repeatedly held that where there is no HSN code attached to a product and when the terms used for the identification of the product do not have a definition under the fiscal statutes, the products have to be understood by applying the theory of common parlance. It is therefore contended that the issue with regard to Tooth Paste and Tooth Powder stands covered by decisions of the Apex Court, in as much as those articles have been specifically held to be toiletries in common parlance and not medicines or cosmetics.
11. Relying on the decision of the Apex Court in M/s Sarin Chemical Laboratory v. Commissioner of Sales Tax, U.P. [1970 (2) SCC 403], it is contended that, the Apex Court had considered whether the product 'Sarin Tooth Powder' is a cosmetic or a toilet requisite and relying on the dictionary meanings of the words and the common parlance theory, held that the Tooth Powder is a toiletry article and not a cosmetic. In State of Gujarat v. Prakash Trading Co., Ahmedabad [(1972) 2 SCC 689] it was held, considering the dictionary meaning of the words "cosmetic" O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..14..
and "toiletry" that Tooth Paste and Tooth Brush are toilet articles and not cosmetics in common parlance.
12. In Maheswari Fish Seed Farm v. T.N.Electricity Board [(2004) 4 SCC 705] the Apex Court considered the question of importing of definitions in other enactments and held that, the definition of a term in one statute does not afford a guide to the construction of the same term in another statute; and in turn does not throw any light on the manner in which the term should be understood generally. Further, learned Senior Government Pleader placed reliance on the decision of the Apex Court in Reckitt Benckiser (India) Ltd v. Commissioner, Commercial Taxes and Others [(2008) 15 VST 10 (SC)]and contended that, in case where an HSN code is indicated in the tariff against an item mentioned in the IIIrd schedule, one has to go by provisions of the HSN code as adopted by the Customs Tariff Act, 1975. It was held that the Kerala VAT Act is aligned with the Customs Tariff which in turn is aligned with HSN and consequently each product in question was required to be seen in the context of the HSN Code and the judgments based thereon. However, where no HSN Code is assigned, learned counsel submits that, the Article has to be O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..15..
understood in the sense of common parlance and not with regard to the definition in another enactments.
13. Relying on a decision of this Court in State of Kerala v. Tips and Toes Cosmetics India Ltd. [2004 KHC 566], it is contended that, 'Kajal', a product of the assessee which was manufactured under a Drug Licence issued by the Drugs Controller, was held to be an 'Ayurvedic Medicine' liable to be taxed at the rate applicable under Entry 79 of the I st schedule, it was contended that the Apex Court held that how the commodity is understood in common parlance is the decisive test where the commodity can be classified under different heads.
14. Learned Government Pleader would also place reliance on a decision in Sreedharareeyam Ayurvedic Medicines (P) Ltd v. State of Kerala [2011) 19 KTR 561 (Ker)] which was also rendered in an O.T. Appeal arising from an order of classification under Entry 36. It is contended by the learned Government Pleader that, Sub-Entry 27 of Entry 36 was necessitated due to the finding of this Court in Sreedharareeyam Ayurvedic Medicines (P) Ltd v. State of Kerala that, all Ayurvedic products would not be included in Entry 36 in view of the exclusion by Rule23. It is O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..16..
contended that it was to grant the benefit to specific "Ayurvedic Cosmetics" which are manufactured under a Drug Licence that the Sub-Entry was included and that the petitioner's products which are not Ayurvedic Cosmetics would not entitled to the benefit of the same. The learned counsel also relies on the fact that the products of the petitioner are claimed to be Ayurvedic Proprietary Medicine and that the appellants themselves do not have a case that the products are cosmetics.
15. We have considered the contentions advanced from either side and have given our anxious attention to the documents on record and the statutory provisions as well as the decisions relied upon by either counsel. As stated above, the issue is with regard to interpretation to be given to Sub Entry 27 of Entry 36 of the III rd schedule. Specific case of the appellant is that, if the definition of Cosmetic as contained in the Drugs and Cosmetics Act is taken note of, the products for which the clarification was sought would all be Cosmetics and therefore, would be exigible to tax at the concessional rate. Per contra, the learned Senior Government Pleader would contend that, the rules of interpretation of the Schedule as contained in the Appendix to the KVAT Act specifically contain exceptions from the entries in the Schedules. O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..17..
16. Rules 23 of the Rule of Interpretation reads as follows:-
Rule 23: Entry 36 in third schedule does not include food or beverages such as dietetic,diabetic or fortified foods, food supplements, tonic beverages, aqueous distillates or aqueous solutions of essential oil suitable for medicinal use soaps or other products containing added medicaments and blood albumin not prepared for therapeutic or prophylactic uses.
17. It is submitted that, Soaps or other products containing added medicaments have been specifically taken out of Entry 36 by the Rules of Interpretation. In the above circumstances, it is contended that the clarification sought for in the case of Soaps and Baby Soaps was misconceived. There was no requirement of any such clarification. With regard to Tooth Paste and Mouth Wash also, it is contended that, the question stands concluded by the decisions of the Apex Court that Tooth Paste and Tooth Powder are toilet articles and cannot be considered as Cosmetics in the common parlance. It is contended that, in the case of 'Baby Gift Packs', the articles are sold as a 'composite packet' with a common MRP and that as such, if the specific article that is "Baby Gift Pack" is not available in Entry 36 of the III rd schedule, the same would be exigible to tax as a unified product in the residual entry, that is at O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..18..
the default rate of tax. With regard to Baby Powder, the learned Government Pleader would submit that there could be an interpretation that it is a Cosmetic in common parlance and that as such, the question with regard to the exigibility of tax of that one product can be reconsidered.
18. It is not in dispute before us that Kerala VAT Act is aligned to the 'Customs Tariff', which in turn is aligned to 'Harmonised Systems of Nomenclature'. In the above view of the matter, in the case of products included in the schedules where the HSN codes are indicated in the schedules or the notifications, there is no difficulty since the products and the interpretations on the basis of the HSN codes would be applicable. However, in the case of Sub Entry 27 to Entry 36, there is no HSN code provided. Contention of the learned counsel for the appellant that the existence of a licence under the Drugs and Cosmetics Act is crucial in nature and as such, the word Cosmetic in Sub entry 27 should be given the same meaning as the definition provided under the Drugs and Cosmetics Act, though an attractive proposition, cannot be accepted for reasons more than one. The Drugs and Cosmetics Act is a part of the regulatory regime for regulating the manufacture O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..19..
and trade in such commodities. The definition in the said act is therefore so wide as to cover all consumable products which could be used as a Cosmetic, in any sense of the word. What we are called upon to interpret is the provision in a taxing statute which grants a concessional rate of tax for certain commodities. In view of the decisions of the Apex Court referred to by the learned Senior Government Pleader for the Revenue, we are of the opinion that, importing of the definition in a statute in the regulatory regime into a fiscal statute would not be warranted in view of the fact that the exemptions or concessions granted in a fiscal statute are to be strictly construed. The Apex Court has repeatedly held that, where there is no definition in the statute itself, then what has to be looked into is how the term is understood in the common parlance.
19. The question therefore would be whether 'Cosmetics', as understood in common parlance would take in the products with regard to which the clarification is sought. The 'Authority for Clarification' has found against the assesee on the ground that the products in question do not have theraputic or prophylactic use and therefore they are not 'medicaments'. It is further stated that Soap, Tooth Paste and Mouth Wash are toilet articles and Baby O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..20..
Powder is more of a toilet article than a cosmetic. In the case of Gift Pack, it is found that the major items in the pack are taxable at 14.5% and that the pack therefore attracts tax at the same rate.
20. The said reasoning may not be a convincing one. However, the Apex Court in M/s Sarin Chemical Laboratory v. Commissioner of Sales Tax, U.P. (Supra) held that Tooth Paste and Tooth Powder are toilet articles and will not be Cosmetics in common parlance. In the above view of the matter, contention raised by the petitioners with regard to Tooth Paste which is one of the products, for which clarification is sought for has to fail. With regard to Baby Soap as well, Rule 23 of the Rules of Interpretation specifically excludes Soaps from the purview of Entry 36. In view of the fact that Soaps stand specifically excluded under Rule 23, we are not called upon to decide the question whether Baby Soap is a toilet article in common parlance or not. The clarification given in Annexure-IV order with regard to Soap also is therefore perfectly sustainable. With regard to the clarification sought for in respect of Mouth Wash, Gift Packs and Ayurvedic Baby Powder, we are of the opinion that the clarificatory order is devoid of any reasons whatsoever in holding that those items would not fall within Sub O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..21..
Entry 27. If the common parlance theory is put to use, we fail to see how the clarificatory authority declined the clarification as sought for by the petitioner, in respect of Baby Powder which can be considered as a Cosmetic in common parlance. With regard to Mouth Wash and Gift Pack also, the clarificatory order does not state any sustainable reasons. In the above view of the matter, the issue with regard to the exigibility of tax at concessional rates under Sub Entry 27 of Entry 36 of the III rd schedule with regard to Baby Powder, Baby Gift Pack and Mouth Wash are issues which require a reconsideration and a reasoned order at the hands of the clarificatory authority.
21. In the result, we uphold the findings contained in Annexure A4 order of clarification with regard to Baby Soap and Tooth Paste as contained in the impugned order. With respect to other products the matter is remanded to the 'Authority for Clarification' for reconsideration and a reasoned order on the exigibility of tax to three other products, i.e., Baby Powder, Mouth Wash and Baby Gift Pack. The Clarificatory Authority shall hear the appellant and pass appropriate reasoned orders considering the contentions advanced on either side, within a period of two months O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..22..
of the date of receipt of a copy of this judgment.
22. In view of disposal of O.T. Appeal 01/2018 as above, the connected writ petitions are also disposed of as mentioned below:
(i) W.P.(C) 6388 of 2018 is hereby allowed to the extent of quashing Ext.P2 order of penality imposed under Section 47(6) of the KVAT Act, 2003. The 2nd respondent therein shall pass fresh orders after taking into consideration of the fresh clarificatory order which will be issued by the Authority concerned, in accordance with the direction issued herein above in O.T. Appeal No. 1/2018, within one month from the date of issuance of such clarificatory order, after affording an opportunity of hearing to the petitioner.
(ii) WP(C) 6390 of 2018 is hereby allowed and Ext.P2 pre-
assessment notice impugned herein is quashed. The 2 nd respondent therein will initiate fresh steps for completing the assessment with respect to the year 2014-15, against the petitioner, depending upon the new clarificatory order which will be issued by the Authority concerned, in accordance with the direction issued herein above in O.T. Appeal No.1/2018. The fresh assessment shall be completed within two months from the date of issuance of such clarificatory O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..23..
order, after issuing fresh pre-assessment notice and after affording an opportunity of hearing to the petitioner.
Sd/-
C.K.ABDUL REHIM, JUDGE Sd/-
ANU SIVARAMAN, JUDGE kkj O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..24..
APPENDIX OF WP(C) 6388/2018 PETITIONER'S/S EXHIBITS:
EXT.P1; THE TRUE COPY OF CLARIFICATION ORDER NO.CT/713/17-C3 DATED 19/10/2017 ISSUED BY THE 1ST RESPONDENT UNDER SECTION 94 OF THE KVAT ACT.
EXT.P2; THE TRUE COPY OF THE PENALTY ORDER NO.RA-1/494/2013-2014 DATED 21/11/2017 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER.
EXT.P3: TRUE COPY OF THE PETITIONER'S DRUG LICENSE DATED 24/02/2012.
O.T.Appeal No. 1 of 2018, W.P.(C) No.6388 of 2018 & 6390 of 2018 ..25..
APPENDIX OF WP(C) 6390/2018 PETITIONER'S/S EXHIBITS:
EXHIBIT P1 THE TRUE COPY OF THE CLARIFICATION ORDER NO.CT/713/17-C3 DATED 19-10- 2017.
EXHIBIT P2 THE TRUE COPY OF THE PRE ASSESSMENT NOTICE DATED 17-1-2018 FOR THE YEAR 2014-2015 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER.
EXHIBIT P3 TRUE COPY OF DRUG LICENSE ISSUED TO THE PETITIONER DATED 24-02-2012.