Bulk drugs under Schedule IV cannot be restricted by executive order, preserving the concessional tax rate for the full statutory category.

An executive order could not narrow entry 16 of Schedule IV of the Andhra Pradesh Value Added Tax Act, 2005, which classified "bulk drugs" for concessional taxation at four per cent. The court reasoned that the power to remove difficulties under section 76(2) could operate only consistently with the Act, while changes to the Schedules had to follow the statutory mechanism under section 79. As a result, bulk drugs falling within entry 16 could not be confined to eight HSN-coded items or treated as unclassified goods at a higher rate. The assessment based on that restriction was unsustainable.

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Issues: Whether the scope of entry 16 of Schedule IV of the Andhra Pradesh Value Added Tax Act, 2005, covering "bulk drugs", could be restricted by an executive order so as to confine the concessional rate to only eight specified items and treat other bulk drugs as taxable under Schedule V at the higher rate.

Analysis: Section 4 of the Act levies tax at the rates specified in the Schedules, and section 4(3) makes goods falling in Schedule IV taxable at the rate prescribed therein. Entry 16 of Schedule IV described "bulk drugs" as a taxable category at four per cent. The power under section 76(2) to remove difficulties permits only such provisions as are not inconsistent with the purposes of the Act, while section 79(1) provides the separate mechanism for altering Schedules subject to legislative control under section 79(2). The Government Order issued under section 76(2) could not, therefore, cut down the width of entry 16 or confine it only to eight bulk drugs on the basis of HSN codes. The advance ruling relied upon by the assessing authority was held to be erroneous to that extent, and the impugned assessment could not treat admitted bulk drugs as unclassified goods merely because they were not among the HSN-coded items.

Conclusion: All bulk drugs falling within entry 16 of Schedule IV were taxable only at four per cent, and the restriction introduced by executive order was invalid against the assessee.

Final Conclusion: The assessment treating the petitioner's goods as taxable at the higher rate could not be sustained, and the writ petition succeeded.

Ratio Decidendi: A power to remove difficulties cannot be used to narrow or override a charging schedule entry; where the statute classifies all goods within a category for concessional taxation, an executive order cannot confine that category to selected items alone.

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