Distilled water is not a medicine or pharmaceutical preparation, so tax on its turnover was unsustainable.

Distilled water was treated as a purified form of water whose distillation only removed impurities and did not alter its essential character or amount to manufacturing. It had no medicinal or pharmaceutical properties by itself, and its use in preparing medicines did not convert it into a medicine or pharmaceutical preparation; because water was exempt and the notification for medicines and pharmaceutical preparations did not apply, the supplementary assessment including distilled water in taxable turnover was unsustainable.

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Issues: Whether distilled water is a medicine or pharmaceutical preparation liable to sales tax under the U.P. Sales Tax Act, and whether the supplementary assessment levying tax on its turnover could stand.

Analysis: Distilled water was held to be only a purified form of water. Its distillation merely removed impurities and did not change its essential character or amount to a manufacturing process. It had no medicinal or pharmaceutical properties by itself, and its use in preparing medicines did not convert it into a medicine or pharmaceutical preparation. Since the sale of water was exempt and the notification covering medicines and pharmaceutical preparations had no application, the reassessment could not validly include distilled water in the taxable turnover.

Conclusion: Distilled water is neither a medicine nor a pharmaceutical preparation, and the tax levied on its turnover under the notification was unsustainable.

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