Case On Mosquito Repellants Quashed

The Supreme Court yesterday dismissed the appeal of Sonic Electrochem Ltd, manufacturer of mosquito repellants, claiming that it was producing insecticide and not a repellant.

Different state laws have treated repellants differently. While some grant tax exemption on the ground that they are insecticides, others levy duty on them as a household item.

Mosquito repellants are charged sales tax in Gujarat whereas insecticides are exempted. The company wanted to get this benefit.

It produced the certificate of registration under the Insecticides Act and formulation and chemistry of the active ingredients.

Different high courts have also dealt with this problem differently. The Madhya Pradesh and Orissa high courts have apparently granted relief to the mosquito repellant manufacturers. But the Gujarat High Court did not accept this company's arguments.

 

The division bench consisting of S P Bharucha and Justice G B Pattanaik rejected the arguments. They said that in the Gujarat Sales Tax, it was clearly stated that mosquito repellants would be charged 12 paise a rupee. In the case of Orissa, the question was whether the repellant produced by the company was insecticide or pesticide.

The Orissa High Court concluded that either way it was exempted from sales tax.

The Madhya Pradesh High Court held that mosquito repellants could be insecticides too.

Thus, the same product has been taxed differently in different states.