The respondent, Cadila Healthcare Ltd., manufactured a product called “KADIPROL” containing Amprolium Hydrochloride and Vitamin K3, used in poultry to prevent coccidiosis. The company sought clarification from the Deputy Commissioner of Sales Tax under Section 62 of the Gujarat Sales Tax Act, 1969 to determine the tax rate applicable to the product. The Deputy Commissioner classified “KADIPROL” as a “Drug and Medicine” under Entry 26(1) of Schedule II, Part A, which attracted tax. The Gujarat Sales Tax Tribunal upheld this finding. However, on reference, the Gujarat High Court held that “KADIPROL” fell under Entry 25 of Schedule I as “Poultry Feed,” making it tax-exempt. The State of Gujarat appealed this decision before the Supreme Court.

The Supreme Court observed that “KADIPROL” was not meant to be fed directly to poultry but to be mixed with feed and that it contained medicinal properties used for preventing infection. The Court found that the High Court had not adequately addressed the reasoning of the Sales Tax Tribunal and had relied only on earlier High Court decisions in Glaxo Laboratories (India) Ltd. v. State of Gujarat and State of Gujarat v. Pfizer Ltd. without an in-depth factual analysis. The Court noted that the issue had become academic, as there were no pending tax demands or revenue implications. Accordingly, the appeal was closed, leaving the broader question regarding the “common parlance test” open for consideration in an appropriate future case.