Oral Judgment: B.P. Colabawalla J. 1. By this reference the Second Bench of the Maharashtra Sales Tax Tribunal (MSTT) has referred the following questions of law for the decision of this Court under section 61 of the Bombay Sales Tax Act 1959:- “(1) Whether on the facts and circumstances of the case, was the Tribunal justified in holding for the products “RA THERMOSEAL” and “THERMOSEAL” are products capable of being used as toothpaste, when their predominant use admittedly is as a medicine for curing, treating and preventing teeth-sensitivity? (2) Whether on the facts and circumstances of the case and on a true and correct interpretation of the two schedule entries viz. C-I-24 and C-II-36 appended to Bombay Sales Tax Act 1959, was the Tribunal justified in law in holding that the “RA THERMOSEAL” is a Tooth Paste covered by schedule entry C-II-36 and not a medicine covered by schedule entry C-I-24 for the sole reason of its being capable of being used as tooth paste and its being covered by the exclusion in schedule entry C-I-24? (3) Whether on the facts and circumstances of the case and on a true and correct interpretation of the two schedule entries viz. C-I-24 and C-II-36 appended to Bombay Sales Tax Act 1959 was the Tribunal justified in law in holding that the “THERMOSEAL” is a Tooth Paste covered by schedule entry C-II-36 and not a medicine covered by schedule entry C-I-24 for the sole reason of its being capable of being used as a tooth paste and its being covered by the exclusion in schedule entry C-I-24?” 2. The present dispute revolves around the interpretation of Schedule Entry C-I-24 of the BST Act, which related to “medicines”, and was in force from 01-05-1993 to 30-09-1995. To understand the controversy it would be necessary to set out the necessary Entries and the amendments thereto. The present dispute revolves around the interpretation of Schedule Entry C-I-24 of the BST Act, which related to “medicines”, and was in force from 01-05-1993 to 30-09-1995. To understand the controversy it would be necessary to set out the necessary Entries and the amendments thereto. The Schedule Entry relating to “medicines” between 01-05-1993 and 30-09-1995 was C-I-24 which read as under:- 1 2 3 4 5 24(I) Drugs, being medicinal formulations or preparations and subject to the Drugs (Price Control) Order conforming to the following description–Any medical formulation or preparation ready for use internally or externally, for treatment or mitigation or prevention of diseases in human beings or animals but not including - (a) goods covered, described or specified in any other entry in this Schedule; (b) medicated goods; (c) products capable of being used as toothpaste, tooth powders, cosmetics, toilet articles and soaps. (d) mosquito repellants in any form. 4.00% 4.00% 1-5-1993to 30-9-1995 3. Thereafter, on 1st October 1995, exhaustive amendments were made to the BST Act, as a result of which, the Schedules appended to the said Act underwent radical changes. In fact, they were replaced by new Schedules altogether. As far as the Entry relating to “medicines” is concerned, the earlier Schedule Entry C-I-24 was replaced with no major changes in description, by Schedule Entry C-II-37 (with increase in the tax rate from 4 % to 6 %). Thereafter, the new “medicines” Entry C-II-37 was amended on 29th June 1996 with retrospective effect from 01-10-1995. The new amended “medicines” Entry C-II- 37 read as under:- 1 2 3 4 5 37 Drugs (including Ayurvedic, Siddha, Unani, Spirituous Medical Drugs and Homeopathic Drugs), being formulations or preparations conforming to the following descriptions, namely-Any medicinal formulation or preparation ready for use internally or externally for diagnosis, treatment, mitigation or prevention of any diseases or disorder in human beings, animals and birds which is manufactured, imported into India, stocked, distributed or sold under licence granted under the Drugs and Cosmetics Act 1940, but excluding mosquito repellants in any form. 6.00% 6.0 % 1-10-995 To 30-9-1996 4. On a comparison of Schedule Entry C-I-24 (before amendment) and C-II-37 (after amendment), it is clear that with effect from 01-10-1995, the exclusions appearing in the “medicines” Entry C-I-24 at (a), (b) & (c) were deleted from the new “medicines” Entry C-II-37, thereby expanding the scope of the Entry relating to “medicines”. 5. 6.00% 6.0 % 1-10-995 To 30-9-1996 4. On a comparison of Schedule Entry C-I-24 (before amendment) and C-II-37 (after amendment), it is clear that with effect from 01-10-1995, the exclusions appearing in the “medicines” Entry C-I-24 at (a), (b) & (c) were deleted from the new “medicines” Entry C-II-37, thereby expanding the scope of the Entry relating to “medicines”. 5. Having said this, we shall now turn our attention to the facts of the present case. The brief facts are as follows:- (a) The Applicant was the original Appellant in Appeal No.18 of 1995 and Appeal No.4 of 1999. It is engaged in the manufacture of drugs and medicines with its factory being in Ankleshwar, Gujarat and its office in Mumbai. For manufacturing of drugs and medicines, the Applicant has been granted the necessary licence under the Drugs and Cosmetics Act, 1940. Amongst other products, the Applicant also manufactures two products called 'THERMOSEAL” and “RA THERMOSEAL” (the said products). (b) In September 1993, the Applicant, under section 52 of the BST Act, applied to the Commissioner of Sales Tax, Maharashtra State, Mumbai, seeking determination as regards the classification of the said products sold under its invoice dated 13th September 1993, and the rate at which sales tax was payable in respect of the said products. It was claimed by the Applicant that both the aforesaid products were “medicines” covered by the then existing Schedule Entry C-I-24 liable to tax at 4%, since the said products were specially formulated to treat “mild to moderate” sensitivity and “severe” hypersensitivity of the teeth. (c) The Commissioner however rejected the Applicant's contention, and by his order dated 8th December 1994 held that the aforesaid products of the Applicant were “toothpaste” covered by the then existing Schedule Entry C-II-36 liable to sales tax at 8%. According to the Commissioner, the said products were sold and used as “toothpaste” and therefore, stood excluded from the “medicines” entry by virtue of the specific exclusion appearing in Schedule Entry C-I-24. (d) Against this determination order dated 8th December 1994, the Applicant filed an Appeal before the MSTT which was registered as Appeal No.18 of 1995. (e) Thereafter, the BST Act was substantially amended on 1st October, 1995. (d) Against this determination order dated 8th December 1994, the Applicant filed an Appeal before the MSTT which was registered as Appeal No.18 of 1995. (e) Thereafter, the BST Act was substantially amended on 1st October, 1995. In light of these amendments, the Applicant, in July 1996, again made an application under section 52 of the BST Act to the Commissioner of Sales Tax, Maharashtra State, Mumbai, seeking determination as regards the classification of the same products, viz. “THERMOSEAL” and “RA THERMOSEAL” sold under its invoice dated 15th July, 1996. It was contended on behalf of the Applicant that since the specific exclusions in the “medicines” Entry was removed by the amendment of 29th June 1996, the said products would be squarely covered therein on the basis of its medicinal contents. (f) By his order dated 30th October 1998, the Commissioner rejected these contentions and held that the said products are medicated toothpastes covered by the new Schedule Entry C-II-32 pertaining to “toothpastes” and liable to tax at the rate of 10%. The Commissioner held that the new Schedule Entry C-II-32 pertaining to “toothpastes”, whether medicated or not, would outweigh the general Entry pertaining to “medicines” viz. Schedule Entry C-II-37. Against this determination order dated 30th October 1998, the Applicant filed another appeal before the MSTT which was registered as Appeal No.4 of 1999. (g) The aforesaid Appeal No.18 of 1995 and Appeal No.4 of 1999 were disposed off by the MSTT vide its common judgment dated 12th January 2001. The MSTT held that the said products of the Applicant were “medicines” under the relevant Schedule Entries C-I-24 (before amendment) and C-II-37 (after amendment). It however held that since there was a specific exclusion in Schedule Entry C-I-24 (before amendment) in respect of products capable of being used as toothpaste, the said products of the Applicant under it's first invoice dated 13th September, 1993 were excluded from the Schedule Entry C-I-24 and therefore fell under Schedule Entry C-II-36 (before amendment) relating to “toothpaste”. Accordingly, Appeal No.18 of 1995 was dismissed by the MSTT. (h) So far as the second invoice dated 15th July 1996 was concerned, the MSTT held that by virtue of the amendments to the BST Act, the “medicines” Entry viz. C-I-24 was substantially amended and renumbered as Entry C-II-37, which inter alia deleted the specific exclusions that were existing in Entry CI-24. (h) So far as the second invoice dated 15th July 1996 was concerned, the MSTT held that by virtue of the amendments to the BST Act, the “medicines” Entry viz. C-I-24 was substantially amended and renumbered as Entry C-II-37, which inter alia deleted the specific exclusions that were existing in Entry CI-24. It therefore held that in the absence of such specific exclusions, the said products under the second invoice dated 15th July, 1996 would be classified as “medicines” in Entry C-II-37 (after amendment) and not as “toothpastes” under Schedule Entry C-II-32 (after amendment). Accordingly, the MSTT allowed Appeal No.4 of 1999 filed by the Applicant and set aside the determination order dated 30th October 1998 passed by the Commissioner. (i) Being aggrieved by the dismissal of it's Appeal No.18 of 1995, the Applicant preferred Reference Application No.47 of 2001 before the MSTT and prayed that the questions of law set out earlier in this judgement, be referred to this court under section 61 of the BST Act. The MSTT allowed the Reference Application No.47 of 2001 and referred the above questions of law to this court for its decision. It is important to note that the Revenue did not prefer any Reference Application in Appeal No.4 of 1999 which was allowed in favour of the Applicant. Therefore, the Revenue has accepted the findings of the MSTT in its judgement dated 12th January, 2001. 6. Mr Surte, the learned counsel appearing on behalf of the Applicant, contended that the MSTT, having come to the conclusion that the said products of the Applicant are “medicines”, was not justified in excluding the same from Schedule Entry C-I-24 and classifying it under Schedule Entry C-II-36 that related to “toothpaste”. He submitted that the crown of the teeth has a hard protective outer layer called enamel. This enamel, if lost partly or fully, results in exposure of dentin, a sensitive layer of the teeth. A painful sensation results when dentin is touched or is exposed to hot, cold, sweet, sour substance. This occurs more commonly because of gum diseases and improper brushing and can be unbearably painful and disturbing, requiring the consultation of a dentist. This hyper-sensitivity in teeth can be cured and the teeth can serve as normal functional teeth provided the patient takes proper care as advised by the dentist. He submitted that the Applicant's said products cure this hyper-sensitivity in teeth. This hyper-sensitivity in teeth can be cured and the teeth can serve as normal functional teeth provided the patient takes proper care as advised by the dentist. He submitted that the Applicant's said products cure this hyper-sensitivity in teeth. He submitted that for immediate relief in such cases of hyper-sensitivity, dentists recommend the use of “RA THERMOSEAL” toothpaste which is one of the said products manufactured by the Applicant. He submitted that the words 'RA' stand for “rapid action” as the product acts as a quick reliever from severe pains because of the substance “potassium nitrate 5%” contained therein. According to Mr Surte, the said product is nothing but a “medicine” in the form of a paste and since it has to be applied on the teeth, it is called “toothpaste”. It has to be applied with the help of a soft brush. He submitted that while RA THERMOSEAL toothpaste is being used, the patient is advised not to use his regular toothpaste or mix it with any other toothpaste. According to Mr Surte, the main reason for prohibiting use of regular toothpaste is that if the regular toothpaste is used side by side, then the Applicants' products will not have the desired effect within the desired time. He submitted that whilst predominantly acting as a “medicine”, RA THERMOSEAL incidentally cleans the teeth and therefore there is no need to use a regular toothpaste. He submitted that the RA THERMOSEAL toothpaste is to be used for a limited period and then has to be replaced by THERMOSEAL toothpaste which is the other product manufactured by the Applicants. This product also contains a substance “Strantim Chloride Hexahydrate 10%” due to which it has the effect of treating teeth having mild to moderate sensitivity. He submitted that a person having teeth which are prone to sensitivity, are advised to use THERMOSEAL on a permanent basis, since it's stoppage is most likely to lead to recurrence of teeth sensitivity. He therefore submitted that the said products are “medicines” for treating teeth sensitivity though incidentally they also help in cleaning the teeth. In view of this, Mr Surte contended that the said products of the Applicant did not fall within the exclusion clause of C-I-24 viz. products capable of being used as toothpaste as they were primarily and mainly used for treating teeth sensitivity and not for cleaning teeth. In view of this, Mr Surte contended that the said products of the Applicant did not fall within the exclusion clause of C-I-24 viz. products capable of being used as toothpaste as they were primarily and mainly used for treating teeth sensitivity and not for cleaning teeth. He submitted that the said products incidentally clean teeth and it is not their primary object. In light of this, he submitted that the MSTT was incorrect in holding that the said products sold under the Applicant's invoice dated 13th September 1993 were excluded from the Schedule Entry C-I-24 that related to “medicines”, only on the ground of the said exclusion. 7. It is an admitted fact that the said products of the Applicant fall within the description of “medicines” as held by the MSTT in its order dated 12th January 2001. The only question therefore that falls for consideration is whether the said products are excluded from Schedule Entry C-I-24 by virtue of the fact that they are products capable of being used as a toothpaste. 8. There appears to be no dispute about the proposition that products used by people as a toothpaste with a view to clean the teeth as part of one's daily exercise, is commonly understood as a toothpaste. Similarly, if such products besides cleaning the teeth also serve as a preventive measure by virtue of some medicinal contents therein, then it can be called as a “medicated toothpaste”. 9. On the Applicant's own showing, a person affected by, or prone to teeth sensitivity has to stop the use of a regular toothpaste on a permanent basis, since the problem of teeth sensitivity is very likely to re-occur if the affected person again starts using the regular toothpaste. In order to avoid this, they are advised to use the said products of the Applicant on a permanent basis. This makes it clear that the person affected or prone to teeth sensitivity cannot go back to the regular toothpaste as a part of the daily exercise of dental care. In these circumstances, such a person uses the said products of the Applicant, which serve the purpose of teeth cleaning as also that of “medicine”. This makes it clear that the person affected or prone to teeth sensitivity cannot go back to the regular toothpaste as a part of the daily exercise of dental care. In these circumstances, such a person uses the said products of the Applicant, which serve the purpose of teeth cleaning as also that of “medicine”. The incapability of such an affected person to use the regular toothpaste has necessitated the Applicant to make the said products useful for teeth cleaning also, so that the class of persons affected thereby can continue the use of these products on more or less permanent basis, not only as a medicine to avoid recurrence of teeth sensitivity, but also as a toothpaste for cleaning of the teeth. This is also clear from the advertising material of the Applicant which reads as under:- “You too, should feel a decrease in sensitivity within two weeks of regular use of Thermoseal. To obtain maximum relief, it is important to follow the instructions of your dentist and do as advised above. If you brush irregularly or stop brushing with Thermoseal once pain is reduced, sensitivity could return. Thermoseal has been specially formulated with a pleasant fresh taste and low abrasive formula which cleans your teeth and leaves your mouth tingling fresh. Hence there is no need to use a regular ‘;43toothpaste. Do not mix Thermoseal with any other toothpaste.” “Regular daily brushing with Thermoseal will keep your teeth sparkling clean, while building increasing 567protection against painful sensitivity to cold, heat, acids, sweets or contacts” (emphasis supplied) 10. From the said advertising material, it is clear that the Applicant itself claims that the said products have been specifically formulated with a pleasant fresh taste and low abrasive formula for cleaning the teeth and leaving the mouth tingling fresh. Even the said products are marketed as “No.1 toothpaste for sensitive teeth”. To our mind therefore, it is clear that though the said products of the Applicant are “medicines”, that would fall under Schedule Entry C-I-24, the same would be excluded from the said Entry by virtue of the exclusion clause therein viz. “Products capable of being used as toothpaste, tooth powders, cosmetics, toilet articles and soaps”. 11. To our mind therefore, it is clear that though the said products of the Applicant are “medicines”, that would fall under Schedule Entry C-I-24, the same would be excluded from the said Entry by virtue of the exclusion clause therein viz. “Products capable of being used as toothpaste, tooth powders, cosmetics, toilet articles and soaps”. 11. This being the position, the MSTT was fully justified in coming to the conclusion in its order dated 12th January 2001 that the said products of the Applicant were capable of being used as a toothpaste which was specifically excluded from the “medicines” Schedule Entry C-I-24. The said products of the Applicant, despite having the basic character of “medicines”, did not fall in the “medicines” Entry C-I-24 because of the exclusion contained therein. 12. Mr. Sonpal, the learned counsel appearing on behalf of the Opponent, rightly argued that even if one were to apply the common parlance test to the said products of the Applicant, they would be “products capable of being used as toothpaste” and therefore, excluded from Schedule Entry CI-24. In this regard, the reliance placed by Mr Sonpal, on the judgment of the Supreme Court in the case of Commissioner of Central Excise, New Delhi v/s M/s Connaught Plaza Restaurant (P) Ltd., New Delhi, reported in 2013 (1) SCJ 496 : (2012) 13 SCC 639, is well founded. Paragraphs 20, 21 & 22 of the SCC report read as under:- “Common parlance test 20. Time and again, the principle of common parlance as the standard for interpreting terms in the taxing statutes, albeit subject to certain exceptions, where the statutory context runs to the contrary, has been reiterated. The application of the common parlance test is an extension of the general principle of interpretation of statutes for deciphering the mind of the law-maker; “[i]t is an attempt to discover the intention of the legislature from the language used by it, keeping always in mind, that the language is at best an imperfect instrument for the expression of actual human thoughts.” (See OswalAgro Mills Ltd. [1993 Supp (3) SCC 716] , SCC p. 721, para 4.) 21. A classic example on the concept of common parlance is the decision of the Exchequer Court of Canada in R. v. Planters Nut and Chocolate Co. A classic example on the concept of common parlance is the decision of the Exchequer Court of Canada in R. v. Planters Nut and Chocolate Co. Ltd. [1951 CLR 122 (Can)] The question involved in the said decision was whether salted peanuts and cashew nuts could be considered to be “fruit” or “vegetable” within the meaning of the Excise Tax Act. Cameron, J., delivering the judgment, posed the question as follows: “… Would a householder when asked to bring home fruits or vegetables for the evening meal bring home salted peanuts, cashew or nuts of any sort? The answer is obviously ‘no’.” Applying the test, the Court held that the words “fruit” and “vegetable” are not defined in the Act or any of the Acts in pari materia. They are ordinary words in everyday use and are therefore, to be construed according to their popular sense. 22. In RamavatarBudhaiprasad v. STO [ AIR 1961 SC 1325 : (1962) 1 SCR 279 ] the issue before this Court was whether betel leaves could be considered as “vegetables” in the Schedule of the C.P. & Berar Sales Tax Act, 1947 for availing the benefit of exemption. While construing the import of the word “vegetables” and holding that betel leaves could not be held to be “vegetables”, the Court observed thus: (AIR p. 1326, para 4) “4. … But this word must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. It has not been defined in the Act and being a word of everyday use it must be construed in its popular sense meaning ‘that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it’.” (emphasis supplied) What flows from a reading of the decision of the Supreme Court is that in the absence of a statutory definition in precise terms; words, entries and items in taxing statutes must be construed in terms of their commercial or trade understanding, or according to their popular meaning. In other words, they have to be construed in the sense that the people conversant with the subject matter of the statute, would attribute to it. Resort to rigid interpretation in terms of scientific and technical meanings should be avoided in such circumstances. In other words, they have to be construed in the sense that the people conversant with the subject matter of the statute, would attribute to it. Resort to rigid interpretation in terms of scientific and technical meanings should be avoided in such circumstances. Needless to say that this would not apply when the Legislature has expressed a contrary intention such as by providing a statutory definition of the particular entry, word or item in specific, scientific or technical terms. In that event, the interpretation ought to be in accordance with the statutory definition or meaning and not according to common parlance understanding. 13. In the present case, even applying the common parlance test, we have no hesitation in holding that though the said products of the Applicant fall within the “medicines” Schedule Entry C-I-24, they are products capable of being used as a toothpaste and would therefore be excluded from the said Entry. 14. We also find force in the argument of Mr Sonpal that whether the applicant's said products are capable of being used as a toothpaste, is a question of fact which should not be interfered with by this Court in a reference under section 61 of the BST Act. Mr Sonpal rightly submitted that this question has been determined by the MSTT in favour of the Revenue. In this regard, he relied upon paragraphs 17 and 18 of the judgment of the MSTT dated 12th January 2001. One of the questions posed by the MSTT was whether the said products can be said to have been used by people primarily or mainly for cleaning teeth. In this regard, the MSTT held as follows:- “In our opinion, if these facts are considered then from the point of view of the affected persons, the teeth cleaning done by these products can not be said to be just an incidental use. The product serves a dual purpose of medicine as well as tooth paste. In our view, the use of the product for teeth cleaning, though not predominant, can certainly be said to be equal in extent to that as a medicine. In that view of the matter, in our considered opinion, the products can also be held to be “medicated tooth pastes” covered by both the aforesaid schedule entries relating to toothpaste.” (emphasis supplied) 15. In that view of the matter, in our considered opinion, the products can also be held to be “medicated tooth pastes” covered by both the aforesaid schedule entries relating to toothpaste.” (emphasis supplied) 15. Considering the facts that we have referred to, we agree with the aforesaid findings of the MSTT. In any event, it cannot be said that the said findings are perverse. It was not even contended before us, or even suggested that the said findings are in any way perverse. 16. Accordingly, all the three questions of law referred to this Court are answered in the affirmative and against the Applicant. 17. The Sales Tax Reference is disposed off in the aforesaid terms. There shall be no order as to costs.