Summary
On a determination application under Section 62 of the Gujarat Sales Tax Act, 1969 the Deputy Commissioner and the Tribunal classified 'Kadiprol', a 100-gram sachet of amprolium hydrochloride and vitamin K3 mixed into poultry feed to prevent coccidiosis and blood loss, as a 'drug and medicine' under Entry 26(1) of Schedule II Part A, relying on expert literature and on Eskayef. The Gujarat High Court, answering the reference, held it exempt 'poultry feed' under Entry 25 of Schedule I by relying on its earlier decisions in Glaxo Laboratories and Pfizer without examining the Tribunal's reasoning. The Supreme Court found merit in the State's grievance: the product was not fed directly to birds but added to feed, and the High Court had not dealt with the Tribunal's findings, so ordinarily a remand would follow.
Issues
- Whether a non-nutritional additive mixed into poultry feed to prevent coccidiosis is 'poultry feed' under Entry 25 of Schedule I or a 'drug and medicine' under Entry 26(1) of Schedule II Part A of the Gujarat Sales Tax Act, 1969.
- Whether a High Court answering a sales tax reference may overturn the Tribunal's findings by relying on earlier precedents without examining the Tribunal's reasoning.
- Whether an appeal should be decided or remanded when the question has become academic with no revenue implication.
Provisions considered
- Entry 25 of Schedule I ('poultry feed'), Entry 26(1) of Schedule II Part A ('drugs and medicines'); Sections 62 and 69, Gujarat Sales Tax Act, 1969The classification question arose on a determination order under Section 62 and reached the High Court by reference under Section 69; the Court noted that the product was sold in sachets to be mixed with feed and could not be fed directly, giving some merit to the Revenue's case, but left the question undecided as academic. (¶¶ 2, 2.1, 7, 8)
- Licensing requirement, Drugs and Cosmetics Act, 1940The drugs control authority had informed the manufacturer that no licence was required for Kadiprol, a factor relied on by the assessee against classification as a drug. (¶ 2.1)
Held
- The High Court's judgment merely quoted and relied on Glaxo Laboratories and Pfizer without a detailed examination of the facts found or the Tribunal's reasoning, which had treated the product as a non-nutritional additive falling within 'drug' on expert literature; there was therefore merit in the Revenue's contention and the matter would ordinarily have been remitted. (¶ 7)
- As it was accepted that the issue was of academic interest only, with assessments closed, no tax dues and zero tax effect, the Court declined to remand or decide the appeal and closed the proceedings, expressly keeping open the larger question on the common parlance test for decision in an appropriate case. (¶¶ 7, 8)
Result
Appeal disposed of; proceedings closed as the issue had become academic with no revenue implication, the larger question on the common parlance test being left open.