State Taxation Tribunal - West Bengal
Prabhunath Sharma vs Commissioner Of Commercial Taxes And ... on 2 September, 1998
Equivalent citations: [2000]120STC241(TRIBUNAL)
JUDGMENT M.K. Kar Gupta, Member (T)
1. In this application under Section 8 of the West Bengal Taxation Tribunal Act, 1987, the applicant has prayed for setting aside of the order dated November 26, 1996 passed by the West Bengal Commercial Taxes Appellate and Revisional Board as also the order of assessment passed by the Commercial Tax Officer in respect of the assessment of the applicant for the period of 12 months ending on March 31, 1988 and the appellate order dated March 8, 1994 passed by the Assistant Commissioner of Commercial Taxes, Bally Circle.
2. The case of the applicant is that the applicant is a partner carrying on business, in co-partnership, under the trade name Sharma Chemical Works having his place of business at 35, R.B.S. Road, P.O. Angus, District Hooghly. The applicant is a dealer registered under the West Bengal Sales Tax Act, 1954 for manufacturing hair oil and ayurvedic hair oil. The applicant manufactures "Ayurvedic Cool Banphool Oil". The manufacturer was granted a drug licence, under the Drugs and Cosmetics Act, 1940 and Rules framed thereunder, in form No. 25-D by the Director of Drugs Control, West Bengal, to manufacture Ayurvedic Banphool Oil. The Director of Drugs Control also approved the composition of the product. It is submitted by the applicant that the following diseases and/or physical ailments are cured by applying this product : headache, eye problem, night blindness, reeling of head, weak memory, hysteria, amnesia, blood-pressure, insomnia, stomach pain, pain in eardrum, nausea, burns, nasal bleeding, cuts, heat, stroke, etc. The product, viz., Ayurvedic Cool Banphool Oil is claimed to be specified under Sub-head 3003.30 of the Excise Tariff which deals in ayurvedic medicine. The product was also subjected to research by Roy Ayurvedic Research Centre, a premier research centre on ayurvedic medicine in the country. The research centre has conducted examination of patients belonging to various age groups and comprising both sexes and the statistical data provided in the research report reveals allegedly tremendous effect of the product.
3. In spite of the fact that the product is an ayurvedic medicine, the Commercial Tax Officer charged the applicant's sales for the period from May 1, 1987 to March 31, 1988 at 8 per cent instead of 4 per cent treating the dealer to be a manufacturer of hair oil although it being the only product of the applicant is an ayurvedic drug. Being aggrieved by the order of the Commercial Tax Officer, the applicant filed a petition of appeal before the Assistant Commissioner of Commercial Taxes, Bally Circle, who, by an order dated March 8, 1994, confirmed the said assessment. Thereafter, the applicant filed a petition for revision before the West Bengal Commercial Taxes Appellate and Revisional Board who also, by an order dated November 26, 1996, observed that they were not inclined to interfere with the order of the Commercial Tax Officer, Bally Charge. Being aggrieved by the order of the West Bengal Commercial Taxes Appellate and Revisional Board, the applicant has approached this Tribunal.
4. The case of the respondents as available from their affidavit-in-opposition is that for the period of 12 months ending March 31, 1988, the applicant's turnover of sales liable to tax represented sales of hair oil and hence the tax was levied at 8 per cent in terms of the assessment order for the aforesaid period. No claim of the applicant that ayurvedic hair oil is an ayurvedic drug appears to be on record. The applicant did not appear to have claimed that hair oil manufactured by them was a drug within the meaning of the Drugs and Cosmetics Act, 1940. It is denied that hair oil manufactured and sold by the applicant is an ayurvedic drug. Hair oil is a different commodity liable to tax at 8 per cent and it does not come under ayurvedic drugs as specified under the Notification No. 3574-F.T. dated September 27, 1982. The expression "hair oil" as specified in notification under Section 25 of the West Bengal Sales Tax Act, 1954 (in short, the "1954 Act") was wide enough to include any oil excluding coconut oil during the material period.
5. It is submitted that the applicant did not prefer any claim for treating hair oil manufactured by him as ayurvedic drug at the time of assessment made by the Commercial Tax Officer. However, in the grounds of appeal filed in the Office of the Assistant Commissioner, the applicant claimed himself to be a manufacturer of ayurvedic hair oil and also claimed that the rate of tax should be 4 per cent. In the grounds of appeal also the applicant did not ever claim that ayurvedic hair oil was an ayurvedic drug. There is no separate commodity in the list of notified commodities as ayurvedic hair oil. It is claimed that the Assistant Commissioner of Commercial Taxes, Bally Circle (respondent No.2) rightly held by his order dated March 8, 1994 that ayurvedic hair oil is a hair oil and not an ayurvedic medicine or drug. The West Bengal Commercial Taxes Appellate and Revisional Board after hearing the applicant and the Revenue authorities, declined to interfere with the appellate order of the respondent No. 2 and upheld the appellate order following the ratio decidendi of the judgment and order of this Tribunal in the case of Commissioner of Commercial Taxes, West Bengal v. West Bengal Commercial Taxes Tribunal reported in [1993] 89 STC 355. It is submitted that merely because the substance or substances for the manufacture of hair oil by the applicant is or are ayurvedic substance or substances hair oil manufactured by the applicant therefrom cannot be regarded as ayurvedic medicine within the meaning of Notification No. 3574-F.T. dated September 27, 1982. What is required to be established is whether such hair oil is prescribed and/or used as "drug" or "medicine" by the consumers. Merely because of the claim of the applicant that several diseases and ailments of varied nature, description and names are relieved by his products, such products cannot be called ayurvedic medicine. Hair oil remains hair oil. It is submitted that the hair oil that the applicants manufacture is not used for treatment or diagnosis of any diseases. The substances allegedly used in the manufacture of hair oil by the applicant may have medicinal properties, but because of the presence of such medicinal substances the final product manufactured by the applicant does not become a drug or medicine. The applicant has nowhere said that hair oil as manufactured by the applicant is prescribed by any physician for treatment of any disease or diagnosis. A drug licence issued by the Director of Drugs Control, West Bengal, is not a conclusive proof of the fact that the product manufactured is an ayurvedic medicine or drug for the purpose of levy of sales tax.
In their affidavit-in-reply, the applicants have generally reiterated their case and have further submitted that Notification No. 3574-F.T. dated September 27, 1982 is referential and is dependent on Section 3(a) of the Drugs and Cosmetics Act, 1940. If the applicant's product satisfied the definition, there is no reason why that product will not be treated as so irrespective of the fact whether the substance or substances required for the manufacture of that product are ayurvedic substance or substances. It is also affirmed that the respondent's affirmation that the applicant has nowhere claimed that his products are prescribed by any physician is wrong.
6. Mr. G.C. Mookerji, learned advocate for the applicants, submitted during his argument that the product manufactured by the applicant is an ayurvedic medicine and hence should be taxed at 4 per cent. The Commercial Tax Officer in his assessment order did not deal with this aspect. He merely mentioned that the dealer is eligible to claim exemption from tax in respect of sales for the month of April, 1987 as eligibility certificate was found valid up to April 30, 1987 and thereafter he observed that the taxable balance stood at Rs. 6,57,515.41. He did not go into the question whether the dealer was manufacturing an ayurvedic medicine at all. The Assistant Commissioner in his appellate decision has mentioned the claim of the dealer that ayurvedic hair oil was ayurvedic medicine or drug. The Assistant Commissioner came to the finding that ayurvedic hair oil is also a general hair oil. The West Bengal Commercial Taxes Appellate and Revisional Board (in short, "the Board") has accepted the submission of the departmental representative that dealer in its advertisement laid emphasis on the cosmetic value of the Banphool oil and he did not interfere with the order of the Assistant Commissioner, Commercial Taxes. Mr. Mookerji submitted that the business of the dealer consists of manufacturing hair oil/ayurvedic hair oil. He further submitted that the dealer was a holder of a drug licence issued by the Director of Drugs Control, West Bengal. He had to procure such a drug licence because under Section 18 of the Drugs and Cosmetics Act, 1940 no one could manufacture any drug except under, and in accordance with the conditions of, a licence issued for such purpose. The licence which was issued to the dealer in form No. 25-D of the Drugs and Cosmetics Rules, 1945 was a licence to manufacture for sale of ayurvedic drugs. The list of items and composition of Banphool oil were also approved by the Director of Drugs Control, West Bengal. From this it would be seen that the Director of Drugs Control was of the opinion that the item Banphool oil (ayurvedic) was an ayurvedic drug. He further submitted that if there were any reasons to hold that this was not a drug but a cosmetic, the Director of Drugs Control would have issued a licence for manufacture of cosmetics. The grant of this licence by the Director of Drugs Control showed that it was necessary on the part of the dealer to obtain a drug licence for manufacturing the commodity. In this connection, he referred to the case of Transelektra Domestic Products Limited [1992] 86 STC 497 where this Tribunal had held that mosquito mat is understood to be an insecticide in common parlance. Traders deal with it as an insecticide in accordance with the provisions of the Insecticides Act, 1968. Similarly, in the instant case also the issue of the drug licence by the Director of Drugs Control, West Bengal, shows that the item manufactured under that licence was to be considered to be a drug. Such a licence is not granted very casually as it would be seen from Rule 154 of the Drugs and Cosmetics Rules, 1945 that a licence under this rule is granted by the licensing authority after consulting such expert in ayurvedic system of medicines which the State Government may approve in this behalf. Mr. Mookerji further submitted that the ingredients which are used for manufacture of the product have been approved by the Director of Drugs Control. They are well-recognised ingredients in the ayurvedic system of medicine. In the approved list of items and composition annexed with the drug licence it would be seen that the ingredients have been mentioned in a well-known treatise named Ayurvedic Drabya Guna. Thus the ingredients are well-known ayurvedic ingredients. It would also be seen from the advertisements issued by the applicant as well as from the printed label of the product that the product has been advertised as an ayurvedic medicine which is useful for relief in headache, toothache, ear pain, sunstroke, etc. The composition of the product is also clearly specified on the label. From the promotional literature also it would be seen that the product is claimed as effective in headache, for improving the vision, in cases of vertigo, in hysteria and schizophrenia, migraine and blood pressure. It is also claimed to be effective in inducing sleep. It would, therefore, be seen that the product has so long been advertised as a medicinal product with ayurvedic ingredients. An eminent Kaviraj Dr. Mriganka Mohan Roy, Ayurved Tirtha, MASF, M.D. (Ay.) has certified in clear language the beneficial effects to be obtained by using Ayurvedic Cool Banphool Oil. Mr. Mookerji also drew our attention to the prescriptions issued by a number of ayurvedic practitioners who have prescribed the product "Banphool taila" for their patients. He also stated that the product is available in medicine shops and referred to cash memos issued by two medical stores, one at Calcutta and the other at Korba (Madhya Pradesh). From all these prescriptions, certificates and cash memos it was clear, Mr. Mookerji argued, that the product was not used for cosmetic purposes ; it was an ayurvedic medicine prescribed by ayurvedic practitioners for various ailments. He also submitted that there was no evidence to the contrary offered by the Revenue.
7. Mr. Mookerji also argued that the question whether any particular commodity is an ayurvedic medicine or not is to be determined not by the use for which a particular purchaser may buy it but with reference to the general properties, which make it salable to the entire range of buyers. He referred in this connection to the case of Commissioner, Sales Tax, Uttar Pradesh v. Prayag Chemical Works [1970] 25 STC 85 (All.) [FB], where it was held that whether sodium silicate is a chemical or not is to be determined not by the use for which a particular purchaser buys it but with reference to the general properties which make it salable to the entire range of buyers. In the instant case, Mr. Mookerji argued, it may be that some particular purchaser may buy it for the purpose of applying it on his scalp or hair but as would be clear from the certificate of Dr. M.M. Roy, the beneficial effects to be obtained from the product in question is multifarious and it would not be proper to treat it as a hair oil.
8. Mr. K.K. Saha, learned advocate for the respondents, argued that hair oil including coconut oil whether perfumed or not is a separate commodity specifically notified in Notification No. 3123-F.T. dated the July 15, 1975, as amended. It would be seen that cosmetics of all varieties has also been notified by the same notification. Ayurvedic medicine has been notified separately by Notification No. 3574-F.T. dated the 27th September, 1982. The notification in respect of ayurvedic medicine is as follows :
"Ayurvedic (including siddha) and unani drugs, as defined in clause (a) of Section 3 of the Drugs and Cosmetics Act, 1940 (23 of 1940), but excluding such items of the said drugs as are covered by Notification No. 1658-F.T., dated 1st August, 1956."
Notification No. 1658-F.T., dated August 1, 1956, covers "drugs" as defined in clause (b) of Section 3 of the Drugs and Cosmetics Act, 1940.
It would, therefore, be seen, Mr. Saha argued, that firstly to qualify under the notification relating to ayurvedic medicine, a product should be covered by Section 3(a) of the Drugs and Cosmetics Act, 1940. If something is not covered by the definition in clause (a) of Section 3 of the Drugs and Cosmetics Act, 1940 but satisfies the definition of "drugs" as defined in Section 3(b) then it cannot be treated to be an ayurvedic medicine. Further, hair oil, Mr. Saha argued, is a specific entry and it supersedes the general entry of ayurvedic medicine even if the product is considered to be an ayurvedic medicine and hence even if a hair oil is an ayurvedic medicine, Mr. Saha argued, it should be taxable as hair oil and not as an ayurvedic medicine.
9. Regarding the applicant's claim that the product marketed by him is an ayurvedic medicine, Mr. Saha argued that the product does not fall within the definition of clause (a) of Section 3 of the Drugs and Cosmetics Act, 1940. In that clause it is necessary that the ayurvedic drugs should be manufactured exclusively in accordance with the formulae described in the authoritative books of ayurvedic medicine specified in the First Schedule. Mr. Saha stated that as many as fifty-six ayurvedic books are mentioned in the First Schedule of the Drugs and Cosmetics Act, 1940, but the applicant has not claimed that his product has been manufactured in accordance with any of the formulae described in any of the authoritative books mentioned in the First Schedule. They have referred to a book "Drabyaguna" compiled and enlarged by Kaviraj Debendranath Sengupta and Kaviraj Upendranath Sengupta. Even in that book no formula has been prescribed for the manufacture of this product. Only the properties of the various ingredients used by the applicant have been referred to there. Therefore, this item cannot claim to be considered to be an ayurvedic medicine as defined in Section 3(a) of the Drugs and Cosmetics Act.
10. Mr. Saha submitted that the item is an oil which is applicable to head and hence it is a hair oil. He stated that no reliance should be placed on the alleged medical prescriptions or cash memos showing purchase from medical stores as their credibility is highly suspect considering that, as is apparent from the dates when they were issued, they have been obtained for the purpose of litigation only. Regarding the research study of Dr. Mriganka Mohan Roy, Mr. Saha stated that this was not really a research paper in any sense of the term. It is more like a certificate of opinion. The research paper is a vague and unscientific one and according to this the product is apparently a panacea for all diseases. No reliance should be placed, Mr. Saha argued, on such a patently unscientific certificate. He also argued that the registration of the dealer shows that the products manufactured by him were hair oil/ayurvedic hair oil, Ayurvedic hair oil was included in the certificate on May 28, 1986. Mr. Saha submitted that it would be clear from a mere perusal of the registration certificate that the dealer enjoyed tax holiday on the basis of the eligibility certificate and just before the expiry of the eligibility certificate got the registration certificate amended to take advantage of the lower rate of sales tax applicable to ayurvedic medicines. Under the circumstances, he submitted, the Commercial Tax Officer has taken the correct decision in taxing the product as hair oil.
11. Mr. Saha further submitted that similar points were examined in the case of Dandwala v. State of Gujarat [1993] 88 STC 459 (Guj). In that case the exigibility to tax of a product in the trade name of "Dandwala Keshkalpa" was under examination. It was the case of the assessee that the product was purely an ayurvedic medicine for treatment of various diseases of hair like premature baldness, premature hair loss, etc., checking dandruff and for producing sound sleep. According to the applicant, the product was manufactured out of certain herbs having medicinal properties. On the basis of above, it was sought to be urged that the product cannot be said to be hair oil but would be a medicinal preparation. It was also pointed out before the Revenue authorities that various persons holding important positions, in all walks of life, had certified regarding the effectiveness of the aforesaid preparation, which would also go to show that the product had medicinal value and therefore cannot be simply described as a hair oil. In this case it was urged that there were two entries in the Schedules of the Gujarat Sales Tax Act, 1969 ; one was in respect of medicines and drugs while the other one was in respect of hair oil and if it was accepted that the product in question had certain medicinal properties, it was argued, the same should fall within the entry relating to medicines and drugs. It was held that it cannot be said that the entry relating to medicines and drugs is a special entry within which the product in question would fall. Mr. Saha also referred to the case of Commissioner of Sales Tax v. Shri Sadhna Aushadha-laya [1963] 14 STC 813 (MP). The question before the Madhya Pradesh High Court in this case was whether the product known as Maha Bhringraj hair oil manufactured by the assessee was an ayurvedic preparation or not. In this case it was argued that the oil in question was prepared and manufactured according to a certain formula given in ayurvedic medicinal books and that it had a bad odour, and that it was a specific for headache, burning of eyes and for preventing falling hair. It was held that there can be little doubt that the oil in question was a "toilet article" as well as a "cosmetic". Every hair oil, whether it is manufactured scientifically with ingredients containing some medicinal properties or crudely, is intended as a hair tonic, for the prevention of dandruff, falling hair and baldness and for beautifying ultimately the hair and the appearance of the persons using it. A hair oil may cool the brain or improve the system and induce sound sleep but it was held that it did not, because of these qualities, become a medicinal preparation. Mr. Saha also referred to the case of Khandelwal Drug Agencies v. Commercial Taxes Officer, "E" Circle, Jaipur [1997] 104 STC 204 (RTT); (1999) 29 STA 286 (RTT), where it was held that the true character of a preparation cannot be ascertained from the description of the product in the advertisement or label as an ayurvedic medicinal preparation. It is usual for a manufacturer, it was held, who sells his products to exaggerate the virtues of his products, but it is not safe to rely on all these claims. It was also held that mere obtaining licence under certain Acts and getting clearance under certain other Acts cannot entitle a person to obtain benefits under an Act which has nothing to do with these Acts.
12. In reply, Mr. Mookerji submitted that in the Khandelwal Drug Agencies [1997] 104 STC 204 (RTT) ; (1999) 29 STA 286 (RTT), the applicant had not produced (1) the product literature of "Swad", (2) evidence of any practising vaidya recommending "Swad" as a medicine, (3) evidence from the trade to show that these tablets are being marketed and accepted as medicine, (4) result of the clinical trials of "Swad" tablets and (5) any booklet on Ayurvedic Medicines mentioning "Swad" as a medicine. In the instant case all these details have been given.
13. The Assistant Commissioner in his order has referred to the entry of hair oil. He has mentioned that from the explanation given under the entry "hair oil" it is found as below :
"Hair oil shall mean any oil which is sold in any packed containers to be used as hair oil or any kind of oil which has been subjected to processing for being used as hair oil, but shall not include in either case coconut oil."
He observed that the dealer had claimed ayurvedic hair oil as ayurvedic medicine or drug, which contained til oil as the main component, other ingredients being haritaki, lawanga, chandan and certain herbs. He held that from the given definition and explanation, ayurvedic hair oil is also a general hair oil. In the course of the revision application the West Bengal Commercial Taxes Appellate and Revisional Board has upheld this order of the Assistant Commissioner, Commercial Taxes.
14. The applicant has claimed that the product manufactured by him is an ayurvedic hair oil for the purpose of manufacture of which he has been granted a drug licence under the Drugs and Cosmetics Act. The composition of this product has also been approved by the Drugs Controller. He has claimed that the product is therefore an ayurvedic medicine.
15. As far as the licence to manufacture ayurvedic drugs issued by the Director of Drugs Control, West Bengal and his approval of the composition of the product are concerned, it is quite clear that a drug licence issued under the Drugs and Cosmetics Rules, 1945, is no conclusive proof of the fact that the preparation for which the licence has been issued is a drug within the meaning of the Drugs and Cosmetics Act, 1940. Naturally the sales tax assessing authority must apply his mind. That being the position, the quasi-judicial authority under the sales tax law is not bound to treat the product as a drug or an ayurvedic medicine merely by virtue of the drug licence. A drug licence under the Drugs and Cosmetics Act, 1940 is not a conclusive evidence of the fact that for the purpose of taxation under the West Bengal Sales Tax Act, 1954, the product manufactured under the licence is a drug or an ayurvedic medicine. Mere obtaining of licence under certain Acts and getting clearance under certain Acts cannot entitle a person to obtain benefits under an Act which has nothing to do with these Acts. The Revenue authorities have taxed the product as a hair oil and it is not seriously disputed that the product Ayurvedic Cool Banphool Oil is mostly used by application to head as oil for the hair. Even in the certificate of Roy Ayurvedic Research Centre relied on by the applicant the mode of application of the oil in different types of complaints have been indicated. In many of the cases like headache, fatigue, vertigo, insomnia, dandruff, premature grey hair and falling hair, the oil has to be applied to the head (obviously as oil for the hair). Hence there is no reason to hold that this cannot be considered to be a hair oil.
16. In support of his plea the applicant has enclosed cash memos from medical stores to show that the product is sold from medical stores, prescriptions from ayurvedic practitioners to show that they prescribed this product and has also enclosed a research report prepared by one Dr. Mriganka Mohan Roy who is stated to be an expert in ayurveda. Mr. Saha has, in our opinion, rightly pointed out that the cash memos issued by the medical stores and prescriptions written by the ayurvedic practitioners should be treated with caution. It is seen that all these documents bear different dates in the months of May, 1997 and September, 1997. The West Bengal Commercial Taxation Appellate and Revisional Board passed their order on November 26, 1996. This instant application was registered on September 15, 1997. Mr. Saha has urged that these cash memos and prescriptions have been procured for the purpose of building up the case of the applicant before this Tribunal. While this proximity in time may not be a conclusive piece of evidence, there is no doubt that the evidentiary value of these prescriptions and cash memos becomes somewhat suspect in view of the fact that they were procured within a short period before filing this petition. In any case purchase of a product from a medical store does not prove that the material purchased is a medicine as non-medical items are also sold from chemist stores. Similarly, the inclusion of any item in the prescription of a medical practitioner may not necessarily mean that the item concerned must be a medicine. To cite an example, a prescription specifying that a patient should take 50 grams of white meat per day does not mean that white meat should be considered to be a medicine. Hence whether a substance is a medicine of a particular type or not should depend upon evidence strictly bearing upon that point.
17. The applicant has sought to rely on the research paper prepared by one Dr. Mriganka Mohan Roy who is stated to be an expert in ayurvedic medicine. The credentials of Dr. Mriganka Mohan Roy apparently are quite impressive as he is reported to be the Chairman of the Post-graduate and Under-graduate Board of Studies, Calcutta University and also the Chairman of the Ph. D. Committee of Calcutta University in Ayurveda. Mr. Saha, learned advocate for the respondents, has submitted in the course of his arguments, that the so-called research paper is a command performance and is totally fake and unscientific and should not be relied upon. On going through the report, it is difficult to agree with the applicant that this report should be taken to be of great evidentiary value in deciding upon the question whether the product of the applicant is any type of ayurvedic medicine at all. At page 5 of the report the product under study has been mentioned as "Ayurvedic Cool Banphool Oil" while in page 6 of the report the aims and objects of the study have been described as follows :
"to evaluate the efficacy of Himani Navratna Taila on concerned disorders". Again in page 7 we find a reference to "Ayurvedic Cool Banphool Oil". Pages 5 and 6 appeared to be parts of the same report, and therefore, it is not quite clear which product was the object of this study ; whether it was Himani Navratna Taila or Ayurvedic Cool Banphool Oil. Secondly, the report patently contained many items which appeared to be somewhat irrelevant as no attempt appears to have been made to link the clinical efficacy of the oil (whether Himani Navratna Taila or Ayurvedic Cool Banphool oil) with the data collected and reported on these parameters. For example, the break-up of the 30 patients stated to be involved in the clinical trial has been given on the basis of age, sex, religion, nature of work, marital status, dietary habit, occupation and economic status. Clinically also the patients were divided into groups based on their blood-pressure and rest. However, in the discussion which appears at pages 58 to 61 and the conclusion which is given in pages 63 and 64 there appears to be very little, if any, reference to the relevance of these classifications, namely, age, sex, religion, nature of work, marital status, dietary habit, economic status and occupation as far as the clinical efficacy of the oil is concerned. There is a general discussion that elderly patients generally above 40 years benefit considerably and those "who perform brain work continuously" benefit from the application of the oil. There is no reason why any data, under the circumstances, should have been recorded relating to the distribution of the patients on the basis of sex, marital status, dietary habits, etc.
18. It appears that this report is one which is very casually drafted but what is even more surprising is that elementary precautions to be taken in a clinical trial regarding provision of suitable experimental design have not been followed in the report. We may refer, in this connection, to the well-known treatise "A Short Textbook of Medical Statistics" by Sir Austin Bradford Hill, CBE, D.Sc., Ph. D. Hon. D.Sc (Oxon), Hon MD(Edin), Professor Emeritus of Medical Statistics in the University of London, etc. This is a standard textbook by an author who is not at least less eminent that the author of the alleged research paper produced by the applicant on the subject of clinical trials. In Chapter 20 of his book dealing with clinical trials the author has stated as follows :
" 'Therapeutics', said Sir George Pickering in his Presidential Address to the section of Experimental Medicine and Therapeutics of the Royal Society of Medicine, is the branch of medicine that, by its very nature, should be experimental. For if we take a patient afflicted with a malady, and we alter his conditions of life, either by dieting him, or by putting him to bed, or by administering to him a drug, or by performing on him an operation, we are performing an experiment. And if we are scientifically minded we should record the results. Before concluding that the change for better or for worse in the patient is due to the specific treatment employed, we must ascertain whether the result can be repeated a significant number of times in similar patients, whether the result was merely due to the natural history of the disease or in other words to the lapse of time, or whether it was due to some other factor which was necessarily associated with the therapeutic measure in question. And if, as a result of these procedures, we learn that the therapeutic measure employed produces a significant, though not very pronounced, improvement, we would experiment with the method, altering dosage or other detail to see if it can be improved. This would seem the procedure to be expected of men with six years of scientific training behind them.
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It would be difficult to put the case for the clinical trial of new (or old) remedies more cogently or more clearly.
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The basic requirement of clinical trials is comparison. In their most exacting form they call for concurrent 'controls', in other words a group of patients corresponding in their characteristics to the specially treated group but not given that special treatment. The question at issue, then, is whether it is proper to withhold from any patient a treatment that might, perhaps, give him benefit.
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The problem will clearly turn in part, and often very considerably, upon what is at stake. If, for example, it be a question of treating the common cold in young adults and seeing whether the duration of 'illness' can be effectively reduced, then the morality of a rigidly controlled trial would not be seriously in doubt--and any other form of trial would probably be uninformative and a waste of time and money. At the other extreme it might be quite impossible to withhold, even temporarily, any treatment for a disease in which life or death, or serious after-effects, were at stake."
19. It would be seen that the diseases for which the patients were subjected to treatment by Dr. Mriganka Mohan Roy were not of a nature where life or death, or serious after-effects were at stake and hence there was no reason why suitable controls should not have been provided. Under the circumstances, this clinical trial is bound to be uninformative and a waste of time and money and should not be considered to be of any value whatsoever. Hence no reliance can be placed upon the report of Dr. Mriganka Mohan Roy.
20. It would, therefore, appear that the applicant has not succeeded in offering any satisfactory evidence to show that the product dealt in by him is a medicine or drug of any type. We must also take note of the fact that the applicant is registered for manufacturing ayurvedic medicine and has all along claimed that his product is an ayurvedic medicine. The notification relating to Ayurvedic medicine refers to Section 3(a) of the Drugs and Cosmetics Act, 1940. Section 3(a) of the Drugs and Cosmetics Act, 1940 requires the medicines to be manufactured exclusively in accordance with the formulae described in authoritative books of ayurvedic medicine specified in the First Schedule. The applicant has not been able to refer to any of the authoritative books of ayurvedic medicine specified in the First Schedule to the Drugs and Cosmetics Act, 1940 as the source of the formula according to which his product has been manufactured. It must, therefore, be held that the product manufactured by him, viz., Ayurvedic Cool Banphool Oil is not covered by Notification No. 3574-F.T., dated 27th September, 1982 and there is no reason for us to interfere with the order of the West Bengal Commercial Taxes Appellate and Revisional Board dated November 26, 1996.
The application is accordingly dismissed without any order as to costs.
J. Gupta, Member (J) I am in full agreement with the findings made by my learned brother (learned Technical Member) as made above ; I like to add a few more words supplemental to what have already been stated in the above judgment.
22. It has been contended on behalf of the applicant that drug licence having been issued for manufacture of "Banphool hair oil", the Revenue cannot take the plea that it is not an "ayurvedic drug". Apart from the fact that the taxing authority should not be bound by a drug licence and he should himself examine whether the product in question is a "drug" or not (the drug licence being an evidence), the authority competent to issue drug licence under the Drugs and Cosmetics Act, 1940, is a creature of the statute itself. In exercising his jurisdiction in regard to anything under the Act he has to identify such thing in the manner the statute demands him to identify. No doubt, issue of drug licence is within the jurisdiction of the authority and in exercise of such jurisdiction law provides, he shall take expert opinion. But exercise of such jurisdiction in issuing a licence for an ayurvedic drug will be proper only if it does not make patent mistake in identifying the product in question in accordance with what the law considers to be ayurvedic drug, i.e., what has been defined under Section 3(a) of the 1940 Act. So, if it is found that the said authority or his consultant expert has failed to make proper appreciation of Section 3(a) in giving licence, the fact of issue of such licence will be of little value. He cannot, by issue of licence, make anything a drug which the Act does not recognise as such. So the intent of the Legislature as expressed in definition of "ayurvedic drug" will alone decide if issue of licence to the applicant by the competent authority was in proper exercise of the jurisdiction or not. Similarly, if Banphool hair oil is not a ayurvedic drug with the parameters laid down in the Act, credentials like a research certificate or cash memo will not change the position. For determining taxability of a product which is claimed to be a drug, it should be examined incidentally (as we are doing) whether the licensing authority correctly exercised his jurisdiction.
23. Now, what the Legislature seeks to recognise as ayurvedic drug ? The term has been defined as follows in Section 3(a) of the Act :
"3(a). 'Ayurvedic, siddha or unani drug' includes all medicines intended for internal or external use for or in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, and manufactured exclusively in accordance with the formulae described in the authoritative books of ayurvedic, siddha and unani (tibb) systems of medicines specified in the First Schedule."
24. Mr. Mookerji has argued that the section gives an "inclusive definition" which means that the definition is not exhaustive in itself but there are items, falling outside the express definition, which are also ayurvedic drug and that an item having medicinal effects for having ayurvedic ingredients will be an ayurvedic drug. He contends that "Banphool oil" will be such an ayurvedic drug though not within the expressly prescribed domain of the inclusive definition given in Section 3(a), But the Legislature in giving an express definition of "ayurvedic drug" has prescribed a rigid condition, fulfilment of which alone will bring an item, even if it is otherwise a medicine, within the scope of the express definition. Such medicine must be "manufactured exclusively in accordance with the formulae described in the authoritative books of ayurvedic systems of medicine specified in the First Schedule" to the Act. If a product simply because of its ayurvedic medicinal ingredient imparting some medicinal quality to the product is considered to be an ayurvedic drug within the meanings of the Act, the rigid conditions laid down in the express definition by the Legislature after due deliberation will be rendered meaningless and superfluous. In such event, manufacturer would not feel obliged to look to the formulae described in the authoritative books or to their compliance. In other words, such open scope of definition, as suggested by Mr. Mookerji, will destroy the very fabric of the specifically deliberated definition spelt out by the Legislature. It cannot be conceived that an "inclusive definition" given in a statute can be interpreted in such a manner that the expressly spelt out part of the scope of the definition can be totally destroyed by a presumed unspelt part of the scope of the definition. Mr. Mookerji wants us to make such an interpretation. We are unable to accept the mode of interpretation which Mr. Mookerji puts to the definition given in Section 3(a).
25. The definition in question may be seen from another view point. It is true that the word "includes" used in the definition of an expression is taken as the word of extension to include things that would not normally come within the ordinary connotation of the expression. But if the expression so defined is stated to include things which comes within its normal connotation, the word "include" should be interpreted as "means". If any authority in this regard is needed the decision of the Supreme Court in the case of South Gujarat Roofing Tiles Manufacturers Association v. State of Gujarat AIR 1977 SC 90 may be referred to. In terms of the express definition ayurvedic medicines must be in accordance with the formulae described in the authoritative books specified in the First Schedule and unquestionable ayurvedic drugs. Therefore, "ayurvedic drug" within the definition contained in Section 3(a) means only those drugs which have been made in accordance with such formulae and none else. Only this interpretation will be in keeping with the legislative intent in regard to the rigid conditions for manufacture of ayurvedic drug.