The central legal point established in the judgment is the interpretation of the categorization of the product 'KADIPROL' as 'Poultry Feed' or as a 'Drug and Medicine' under the GST Act, based on its composition, purpose, and common parlance test.

JUDGMENT :

M.R. Shah, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 05.07.2016 passed by the High Court of Gujarat, at Ahmedabad in STR No.4 of 2005 by which the High Court has answered the reference in favour of the respondent – assessee – dealer holding that the product “KADIPROL” sold by the respondent can be categorized as “Poultry Feed” falling under Entry 25 of Schedule I of the Gujarat Sales Tax Act (hereinafter referred to as “GST Act”) and not as a “Drug and Medicine” under Entry 26(1) of Schedule II Part A of the GST Act, the State of Gujarat has preferred the present Appeal.

2. At the outset it is required to be noted that the present proceeding arise out of the Determination Order passed by the Deputy Commissioner of Sales Tax under Section 62 of the GST Act by which the Deputy Commissioner held that the product in question – KADIPROL would be covered as “Drug and Medicine” under Entry 26(1) of Schedule II Part A of the GST Act.

2.1 The respondent filed an application before the Deputy Commissioner of Sales Tax under Section 62 of the GST Act to determine the rate of tax on “KADIPROL” sold under their invoice dated 20.03.1989. The respondent also preferred an application before the Assistant Commissioner, Food and Drugs Control Administration regarding whether the respondent is required to obtain a license under the Drugs and Cosmetics Act, 1940 (hereinafter referred to as “Act, 1940”) for manufacturing the product “KADIPROL”. That, the Authority under the Act, 1940 informed the respondent that the license for manufacturing of product “KADIPROL” under the Act, 1940 was not required. However, the Deputy Commissioner of Sales Tax, by his order dated 16.04.1990 held that the product in question contains some preventive medicine and therefore, categorized as “Drug and Medicine” as per Entry 26(1) of Schedule II Part A of the GST Act. The Tribunal upheld the order of the Deputy Commissioner. The respondent preferred a Reference Application under Section 69 of the GST Act before the Tribunal for referring the matter for decision of the High Court. The reference was made to the High Court which was numbered as Sales Tax Reference No.4 of 2005.

2.2 By impugned judgment and order, the High Court has answered the reference in favour of the respondent – assessee and has held that the product “KADIPROL” would be covered as “Poultry Feed” under Entry 25 of Schedule I of the GST Act.

2.3 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court holding that the product “KADIPROL” manufactured by the respondent would be covered by Entry 25 of Schedule I of the GST Act as “Poultry Feed”, the State of Gujarat has preferred the present Appeal.

3. Ms. Aastha Mehta, learned Counsel has appeared on behalf of the appellant – State of Gujarat and Ms. Kavita Jha, learned Counsel has appeared on behalf of the respondent – assessee.

4. Ms. Aastha Mehta, learned Counsel appearing on behalf of the appellant – State of Gujarat has submitted that in the facts and circumstances of the case, the High Court has committed grave error in overturning the findings given by the Tribunal and the Deputy Sales Tax Commissioner holding that the product “KADIPROL” can be categorized as “Drug and Medicine”.

4.1 It is submitted that the High Court has not given any reason whatsoever to overturn the findings given by the Tribunal as well as the Deputy Sales Tax Commissioner. It is submitted that both the authorities below in fact considered the expert literature on the subject which ought not to have been brushed aside by the High Court without giving any independent reasoning.

4.2 It is submitted that the composition of “KADIPROL” for every 100 gm was (a) Emporium (Amprolium) Hydrochloride – 25 gm and (b) Vitamin K3 – 250 gm.

4.3 It is submitted that the same product was used to provide protection against coccidiosis due to anticoccodial property of emporium. It is submitted that the presence o