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of <h1>Court remits case to Tribunal to determine tax rate for 'bulk drugs' and pharmaceutical preparations under Kerala Sales Tax Act.</h1> <h3>Chandramani Traders Versus State of Kerala</h3> The Court remitted the case back to the Tribunal to reevaluate whether the items in question, 'bulk drugs' and pharmaceutical preparations, should be ... - Issues:Assessment of sales turnover of bulk drugs and pharmaceutical preparation under different entries of the Kerala General Sales Tax Act, 1963.Analysis:The case involved two tax revision cases filed by the same assessee for different assessment years against a common appellate order. The main issue was whether the sales turnover of bulk drugs and pharmaceutical preparation should be assessed at 6% under entry 116 or at 8% under entry 42 of the First Schedule to the Act. The assessee argued that the items were drugs falling under entry 116, while the Revenue contended they were fine chemicals under entry 42. The Tribunal upheld the Revenue's view, considering the items as chemicals sold to pharmaceutical companies for drug preparation, not directly used as medicines.The definition of 'drug' under the Drugs and Cosmetics Act, 1940 was crucial in determining the nature of the items sold by the assessee. The Act includes substances intended for use in diagnosis, treatment, or prevention of diseases in humans or animals as drugs. The Tribunal found that the items sold by the assessee, named as 'bulk drugs' and pharmaceutical preparations, were components used by pharmaceutical companies for drug manufacturing, not directly applied for treatment. However, the Tribunal's decision lacked consideration of whether the items were understood as drugs by those dealing with them, necessitating a fresh review.The Court emphasized the need to assess whether the items were perceived as drugs by traders and consumers, considering the definition of drugs under the Drugs and Cosmetics Act and the fact that the assessee operated under a license issued under the Act. As such, the matter was remitted back to the Tribunal for a reevaluation of this crucial aspect, allowing parties to present additional evidence if necessary. The tax revision cases were disposed of accordingly, with no order as to costs.
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