The term "poultry-feed" should be construed consistently with its meaning in common parlance, or the way it is understood in commercial parlance, and in view of the change in the concept of poultry-feed, the submission of the learned Assistant Government Pleader that these four products should be regarded as drugs and medicines because they contain terramycin, which is admittedly a drug, cannot be accepted.

The judgment of the Court was delivered by

G. T. NANAVATI, J. - 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 ?

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.

Against this determination, the opponent filed an appeal to the Gujarat Sales Tax Tribunal. Before the Tribunal also, the opponent raised the same contentions and, in the alternative, contended that if these products were not covered by entry 25 of Schedule I, then they would fall within entry 26(1) of Schedule II, and the Deputy Commissioner was, therefore, in error in holding that T.M. poultry formula was covered by entry 26(1) of Schedule II, Part A and the other three products were covered by entry 13 of Schedule III of the Act. There, it was conceded on behalf of the State that if these products are not to be regarded as poultry-feed, then they would fall within the entry "drugs and medicines" being entry 26(1) of Schedule II, Part A. The decision of the Deputy Commissioner that T.M. egg formula, T.M. forte and T.M. 5 would fall under entry 13 of Schedule III was not supported by the State before the Tribunal.

The Tribunal, after referring to the authoritative literature on the subject, and the pamphlets published by the opponent itself as regards the composition and use of these products, and after applying the test laid down by this Court in Glaxo Laboratories (India) Ltd. v. State of Gujarat [1979] 43 STC 386, held that all these four products would be covered by entry 25 of Schedule I as they can be properly described as poultry-feed. The Tribunal held like this as it was of th