Common parlance test governs tax classification of disinfectant fluid as a drug under a specific entry.

Black Disinfectant Fluid was held to fall within Entry 25 of Schedule C of the Haryana Value Added Tax Act, 2003 because fiscal classification must follow the common parlance test, and the undefined term "drug" was understood by reference to Section 3(b) of the Drugs and Cosmetics Act, 1940. On that approach, a product used for prevention of disease and manufactured under a relevant drug licence could qualify as a drug. As the material showed manufacture under a drug licence and classification within the specific entry, resort to the residuary entry was impermissible. The issue was decided in favour of the assessee and against the Revenue.

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Issues: Whether Black Disinfectant Fluid is covered under Entry 25 of Schedule C of the Haryana Value Added Tax Act, 2003, as a drug produced under a drug licence.

Analysis: The applicable interpretative standard for fiscal entries is the common parlance test. The term "drug" was not defined in the Haryana Value Added Tax Act, 2003, so the Court relied on the definition in Section 3(b) of the Drugs and Cosmetics Act, 1940 to understand how persons dealing with the goods would describe the product. That definition is wide enough to include substances used for prevention of disease and products manufactured under the relevant drug licence. The product was manufactured under a licence issued under the Drugs and Cosmetics Act, 1940, and the material on record showed that it fell within the category of drugs. The Court also held that resort to the residuary entry is impermissible where the product falls within a specific entry.

Conclusion: Black Disinfectant Fluid falls within Entry 25 of Schedule C of the Haryana Value Added Tax Act, 2003. The issue is decided in favour of the assessee and against the Revenue.

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