Taxability of free medicine supplies turns on unresolved facts; assessment set aside and matter remitted for fresh enquiry.

Free medicines supplied to stockists or distributors under an announced scheme could not be finally assessed to sales tax on the existing record because the commercial character of the transaction remained unclear. The factual issues included whether the supplies formed part of a prior scheme, whether they were treated as quantity discount in invoices, whether the benefit applied to all products or selected items, and the recipients' tax position. The tribunal held that the Board's view on taxing free samples was inappropriate because it constrained independent assessment. The impugned orders were set aside, the matter was remitted for fresh assessment, and the taxability of the free supplies was left open for reconsideration on fuller evidence.

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Issues: Whether medicines supplied free of cost to stockists/distributors under an announced scheme were exigible to tax under the West Bengal Sales Tax Act, 1994, and whether the assessment matter required remand for fresh consideration.

Analysis: The assessment records did not contain sufficient particulars to conclusively determine the tax character of the free supplies. The Board's observation that free samples should be taxable was found inappropriate because it had the effect of constraining the assessing authority from independently applying its mind. The nature of the supplies, whether they were part of a prior scheme, whether they were reflected as quantity discount in invoices, whether the benefit extended to all products or selected items, and related facts concerning the recipients and their tax position required fresh factual verification. In the absence of those particulars, the taxability of the free medicines could not be finally determined on the existing record.

Conclusion: The impugned orders were set aside and the matter was remitted for fresh assessment after giving the petitioner an opportunity to adduce evidence. The question of taxability of the free medicines was left open for reconsideration on a fuller factual enquiry.

Final Conclusion: The proceeding resulted in remand for de novo assessment, with the earlier findings displaced and the issue of tax liability left to be decided afresh on proper evidence.

Ratio Decidendi: Where the taxability of free supplies depends on unresolved factual questions concerning the scheme, invoice treatment, and commercial character of the transaction, a conclusive assessment cannot be sustained and fresh adjudication is required.

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