Classification of distilled water for injectable medicines turns on its medicinal function and commercial identity, not ordinary goods treatment.

Distilled water sold in vials for use in injectable medicines was treated as falling within the statutory entry for drugs and medicines, because its commercial character was that of a chemically pure, integral component used in the preparation or administration of medicine rather than an ordinary independent commodity. Applying common commercial understanding and the functional role of the goods, the classification followed medicinal use, not general use. On that basis, the turnover was treated as second sales and not exigible to tax under the revised classification.

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Issues: Whether distilled water sold in vials for use in injecting medicines and drugs falls within Entry 37 of the First Schedule to the Andhra Pradesh General Sales Tax Act as drugs and medicines, or is liable to be treated as general goods.

Analysis: Distilled water was found to be chemically pure water prepared to be mixed with injectable drugs and medicines, free from impurities and pathogens. It was treated as an integral component of the injectable medicine, and therefore its commercial character was not that of an ordinary independent commodity. Applying the common sense and commercial understanding of the goods, and following the reasoning accepted in comparable decisions dealing with medicinal or pharmacopoeial goods, distilled water sold for this purpose was held to answer the description of drugs and medicines. On that basis, the turnover represented second sales in the hands of the assessee and was not exigible to tax.

Conclusion: Distilled water sold in vials for use with injectable medicines falls within Entry 37 and is not general goods.

Final Conclusion: The assessee's turnover in distilled water was held not taxable under the revised classification, and the revision failed.

Ratio Decidendi: Goods sold for medicinal use must be classified according to their commercial identity and functional role in the preparation or administration of medicines, and a product that forms an integral component of an injectable medicine may fall within the entry for drugs and medicines.

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