STATE OF GUJARAT Vs. PFIZER LTD

JUDGEMENT

(1.) IN this reference made at the instance of the State, the question which has been referred to us is : whether, on the facts and in the circumstances of this case, the Tribunal was correct in law in holding that the sales of four products in question, namely, (1) T. M. poultry formula; (2) T. M. egg formula; (3) T. M. forte and (4) T. M. 5 would be covered by entry 25 of Schedule I to the Gujarat Sales Tax Act, 1969 and, therefore, they are free all taxes under the said Act, and not by entry 26 (1) of Schedule II, Part A to the said Act ?

(2.) M/s. Pfizer India Limited (hereinafter referred to as "the opponent"), a well-known company manufacturing pharmaceuticals in its veterinary and agricultural division, also manufactures products meant for use of cattle and poultry. Out of many products manufactured by it for the use as poultry feed, we are concerned with (1) T. M. poultry formula, (2) T. M. egg formula, (3) T. M. forte, and (4) T. M. 5. The company sold these products under different invoices in May and October, 1975. It wanted to know the rate of tax payable on the sales of these articles. It, therefore, applied to the Commissioner of Sales Tax under section 62 of the Gujarat Sales Tax Act, 1969, for determination of that question. This application was heard by the Deputy Commissioner of Sales Tax. Before him, the case of the opponent was that as all these products are marketed as poultry-feed and used as such, they are covered by entry 25 of Schedule I to the Act relating to "poultry-feed" and thus exempt from payment of tax. On consideration of the material produced before him, the Deputy Commissioner held that T. M. poultry formula, as it is mainly used for treating and preventing diseases, cannot be regarded as poultry-feed and would fall under entry 26 (1) of Schedule II, Part A pertaining to "drugs and medicines". As regards the remaining three products, he held that though they contain terramycin, which is a drug as their "primary and principal utility is that of a treatment feed given to the poultry for increasing eggs production by supplementary nutrition", they cannot be regarded as drug or medicine. He further held that as the said products contain terramycin, and as terramycin cannot be treated as food, these products cannot be regarded as poultry-feed. Taking this view, he held that these products cannot fall either under entry 25 of Schedule I or entry 26 (1) of Schedule II, Part A to the said Act, and therefore, would be covered by the residuary entry 13 of Schedule III.

(3.) THE State, therefore, sought a reference by making an application under section 69 (2) of the Act. THE Tribunal agreed with the contention of the State that the question of law does arise and has, therefore, referred the abovestated question for the decision of this Court.