‘Poultry Feed Supplements’ are classifiable as ‘Poultry Feed’, Eligible for Trade Tax Exemption: Allahabad HC [Read Judgment]

While allowing Trade Tax Exemption to poultry feed supplements, a division bench of the Allahabad High Court has held that the same are includable in the entry of poultry feed under the  U.P. Trade Tax Act, 1948.

Assessee, in the instant case, was engaged in the business of manufacture sale and purchase of poultry feed/feed supplements and some veterinary drugs of medical use. Assessee claimed exemption from tax on the sale of some items related to his business. However, found that as per literature the said items were used for the treatment of other diseases therefor the items were considered as medicines hence not exempted from tax and 8 percent of tax was charged.

The bench observed that the feed meant for cattle, poultry etc. does not consist of mere food items as are normally known but carry certain minerals, vitamins and other essential   items   which are for better  development  of  cattle, poultry etc. the aforesaid products should added in the animal or poultry feed for strengthening their nutrition hence it cannot be considered as common medicines or drug and these are known in the trade as animal feed supplements and they are sold by the suppliers of animal feed.

The bench also added that it is essential to include the vitamins or concentrates to make balanced poultry feed.

Applying the doctrine of common parlance, the bench observed that “It is well established in order to consider the import of entries of Taxing Institutes, the Doctrine of common parlance is normally applied which means to find out as to how the concerned item is understood by the people but commonly trade therein. Stimulation in humoral and cellular immunity, increase in blood sugar, increase in feed intake, maintaining Osmotic pressure and precise acidbase equilibrium etc. are the only items in which revisionist is dealing that increase the health and strengthening of the poultry and by itself cannot be constituted as a medicine or drug.”

The bench allowed the revision by declaring that the items under poultry feed is eligible for trade tax exemption.

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