SC dismissed appeal for classification of ‘Kadiprol’ as drug & medicine

Case Details: State of Gujarat V. Cadila healthcare ltd. - [2022] 140 taxmann.com 254 (SC)

Judiciary and Counsel Details

• • M.R. Shah & Sanjiv Khanna, JJ.

Facts of the Case

The issue pertains to the classification of ‘Kadiprol’ under the Gujarat Sales Tax Act that whether the same should be classified as ‘poultry feed’ under Entry 25 of Schedule I or ‘drug and medicine’ under Entry 26(1) of Schedule II Part A. The assessee classified the product as poultry feed whereas the Department was of the view that it should be classified as drug and medicine.

The matter reached to the Gujarat High Court where it was held that Kadiprol would be classified as poultry feed. The State of Gujarat then filed an appeal before the Supreme Court.

Supreme Court Held

The Hon’ble Supreme Court dismissed the case on the basis that the judgment passed by the Gujarat High Court lacks a detailed and in-depth examination of facts. The Supreme Court decided not to remand back the matter to the High Court for a fresh decision due to lack of revenue implication. Though, the Supreme Court categorically commented that the question of classification would be kept open and the matter may be considered in an appropriate case by applying the common parlance test.