In Brief
The Supreme Court dismissed an appeal by the State of Madhya Pradesh challenging the High Court's decision that Mediker (an anti-lice treatment) and Revive Instant Starch were not liable to entry tax. The Court held that Mediker, containing the active ingredient D-Phenothrin and licensed as a drug under the Drugs and Cosmetics Act, 1940, is a medicament for treating lice infestation—not a shampoo—and therefore not taxable as a cosmetic. The Court applied the principle that a product's classification is determined by its primary therapeutic purpose, not its method of application. Revive Instant Starch, manufactured from tapioca roots, was found not to be a chemical, as the revenue failed to provide evidence to support such classification. The burden of proof rests on the taxing authority to establish taxability.
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