Potentisation as manufacture justified review and denied eligibility certificate for an expanded industrial unit.

Potentisation of homeopathic medicines was treated as manufacture because the process altered the medicinal commodity and produced a commercially distinct product on the record, including the dealer's own statements, licence and registration materials. On that basis, the second unit at Uttarpara was regarded as an expansion or addition of the existing industrial unit, bringing it within the notification's prohibition on eligibility for the tax-holiday benefit. The review was also held maintainable because the earlier judgment had omitted a fundamental issue apparent from the record, amounting to a mistake apparent from the record and justifying recall under the Tribunal Act.

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Issues: Whether the review application disclosed a mistake apparent from the record warranting recall of the earlier judgment, and whether potentisation of homeopathic medicines constituted manufacture so as to make the second unit an expansion or addition of an existing industrial unit and disentitle the dealer to eligibility certificate.

Analysis: The majority held that the earlier judgment had failed to deal with a fundamental issue arising from the record, namely whether the process of potentisation amounted to manufacture. On the materials in the record, including the dealer's own statements, the drug manufacturing licence, the SSI registration, and the nature of the product after potentisation, the process altered the medicinal commodity so that a different commercial product emerged. The majority further held that the second unit at Uttarpara was an expansion or addition of the earlier unit and therefore fell within the prohibition in the notification issued under section 4AA of the West Bengal Sales Tax Act, 1954. A review was therefore justified under section 16 of the West Bengal Taxation Tribunal Act, 1987.

Conclusion: The review was maintainable and was allowed. Potentisation was held to amount to manufacture, and the dealer was held disentitled to the claimed eligibility certificate because the second unit was an extension of the existing industrial unit.

Ratio Decidendi: Failure to decide a fundamental issue apparent from the record, coupled with material showing that a process creates a commercially distinct product, constitutes a mistake apparent from the record justifying review; a new unit formed as an expansion or addition of an existing manufacturing unit is outside the tax-holiday benefit.

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