Company supplying medicines to approved chemist shops deemed equivalent to supplying to Govt.

The appellate tribunal held that supplying patent or proprietary medicines to approved chemist shops approved by Government departments is deemed equivalent to directly supplying to the Government department under Notification No. 117/66. Therefore, the company was considered eligible for benefits under the notification, and the appeal against the lower appellate authority's decision was dismissed.

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Issues:
Interpretation of Notification No. 117/66 dated 16-7-1966 regarding the supply of patent or proprietary medicines to Government departments. Scope of benefit under the notification when goods are supplied through distributors to approved chemist shops. Whether supply to approved chemist shops is considered as directly supplying to Government departments.

Analysis:
The case involved a dispute regarding the eligibility of a company to avail the benefit of Notification No. 117/66 dated 16-7-1966 for patent or proprietary medicines supplied to the E.S.I.C. (a Government department) through distributors to approved chemist shops. The departmental authorities contended that the company did not fulfill the terms of the notification as the goods were not directly supplied to the Government department but to the approved chemist shops. The lower appellate authority initially ruled in favor of the company but remanded the matter to verify specific facts. Upon readjudication, the demands were confirmed against the company, leading to an appeal.

The appellate tribunal considered the appeal and rejected the appellant's argument. It noted that the lower appellate authority had previously decided the matter in 1978 and the scope of remand was limited to verifying specific facts. The tribunal emphasized that the term "directly" in the notification could include supply to approved chemist shops, as they serve as outlets for the Government department. Therefore, the supply to approved chemist shops was deemed equivalent to supplying directly to the Government department. Consequently, the appeal was dismissed, upholding the lower appellate authority's decision.

Overall, the tribunal's judgment clarified that supplying patent or proprietary medicines to approved chemist shops approved by Government departments could be considered as directly supplying to the Government department, making the company eligible for the benefits under the notification.

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