GLAXO SMITHKLINE PHARMACEUTICALS LTD. & ANR. versus UNION OF INDIA & ORS.

GLAXO SMITHKLINE PHARMACEUTICALS LTD. & ANR. versus UNION OF INDIA & ORS.

The exemption notification under Para 28 of the Drugs (Prices Control) Order, 1987 applies only to manufacture. There is no reference to sale in the exemption, and after the expiry of the exemption period, only goods manufactured after that date are subject to price fixation under DPCO. Demand for recovery based on price difference for goods manufactured within exemption period is not justified.

Parties
Appellant: Glaxo Smithkline Pharmaceuticals Ltd.; Respondent: Union of India
Jurisdiction
India
Judgment Date
18 July 2017
Procedural Posture
Civil Appeal / Appeal From High Court Judgment Dismissing Writ Petition
Outcome
Appeal allowed; High Court judgment set aside.
Legal Topics
Exemption From Price Control, Interpretation of Drugs (prices Control) Order, 1987
Administrative Law Drugs and Pharmaceuticals Exemption From Price Control Interpretation of Drugs (prices Control) Order, 1987

Case Brief

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Parties

Glaxo Smithkline Pharmaceuticals Ltd.

Appellant

Union of India

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment Dismissing Writ Petition

Legal Issues

  1. 1 Whether exemption notification under Para 28 of the Drugs (Prices Control) Order, 1987 applies to manufacture or to sale of bulk drugs
  2. 2 Whether demand for recovery of overcharged amounts after exemption period is justified

Ratio Decidendi

The exemption notification under Para 28 of the Drugs (Prices Control) Order, 1987 applies only to manufacture. There is no reference to sale in the exemption, and after the expiry of the exemption period, only goods manufactured after that date are subject to price fixation under DPCO. Demand for recovery based on price difference for goods manufactured within exemption period is not justified.

Court Disposition

Appeal allowed; High Court judgment set aside.

Orders

  • The demand notice seeking recovery for alleged overcharge is quashed.
  • Appellant is not liable for the amounts demanded for goods manufactured during exemption period.