Y.V.Dixit, President -
(1.) THIS application is preferred against an order made by the Additional Collector of Sales Tax, Bombay City Division (Revision) II, Bombay, on the 27th April, 1959. The facts of the case are these: The applicants are Messrs Pearl & Co., which are a partnership firm. The firm, it is said, is composed of two partners, one of whom is one Dr. L.S. Desai. The firm has business premises which are used also by Dr. Desai as a medical practitioner. The way in which the business is conducted seems to be that Dr. Desai examines patients to whom he gives prescriptions and those prescriptions are presented to the Pearl & Co., which sells the medicines.
(2.) FOR the period from 1st April, 1954, to 31st March, 1955, the Sales Tax Officer, while assessing the firm, included in the turnover of the firm the receipts from the prescriptions and the question which Mr. Mehta for the applicants has raised is whether the receipt of Rs. 6,998 -8 -0 are taxable in the hands of the applicants Now, as regards certain facts there seems to be no dispute. In: the first place, Dr. Desai is one of the two partners composing the partnership firm. It is not in dispute that Dr Desai does consultation work in the same premises in which Pearl & Co. transacts its business. It is again not in dispute that only one set of accounts is maintained by the firm and the amount of the receipts Of the prescriptions is also entered' in the books of account Which are maintained by the firm. It is significant that only one set of accounts is maintained. But that is perhaps accounted for by the fact that Dr. Desai, besides being a medical practitioner; is also a partner in the partnership firm: Dr. Desai has his consultation rooms in the same premises in which' the business of the firm is transacted, because Dr. Desai happens to be a partner of the firm and it is possible that Dr. Desai, being a partner of the firm, shares with his partner the income received by him: as a medical practitioner. But this does not answer the question raised by Mr. Mehta.
(3.) THE point which is raised is that the receipts from the prescriptions are not taxable in the hands of the applicants. - Now, the liability to tax arises under Section 8 (a) of the Bombay Sales Tax Act, 1953. Under that section a sales tax is permitted on the turnover of sales of goods specified in column 1 of Schedule B, so that what is taxable is the sale of goods. The expression "goods" has been defined in Section 2 (8) as meaning all kinds of movable property other than newspapers, actionable claims, stocks, shares and securities and includes all materials, Articles and commodities. Section 2(14) defines the expression "sale price" as meaning the amount of valuable consideration payable to a dealer for the sale of any goods. Section 2 (20) defines the expression "turnover of sales" as meaning the aggregate of the amounts of sale price received and receivable by a dealer in respect of any sale of goods made during a given period. It is clear, therefore, that what is taxable under the law is the sale of goods. Mr. Mehta argues that whatever professional services rendered by Dr. Desai cannot be the subject of sales tax, although Dr. Desai happens to be a partner of the partnership firm which is a dealer. Mr. Mehta would seem to be right. What is taxable is the sale of goods and not the rendering of professional services and this, I think, is elementary. But the difficulty in the way of Mr. Mehta is that it is not shown that the receipts from the prescriptions are wholly or partially with reference to the consultation charges of Dr. Desai. On the contrary, the prescriptions given by Dr. Desai would show the medicines prescribed and so far as this case is concerned, it is entirely a matter of speculation because the prescriptions for the1 relevant period are not produced before the Sales Tax Authorities. If then the Sales Tax Authorities have included in the turnover the receipts from the prescriptions it can be only on the footing that the prescriptions represent the medicines recommended by Dr. Desai and purchased by the patients from Messrs. Pearl & Co. That, clearly, is the sale of goods; I agree that the giving of professional advice or the giving of professional skill as a doctor cannot constitute a sale of goods within the meaning of Section 2 (8) of the Act. But Mr. Mehta argues that the receipts of the prescriptions contain not merely the medicines but also his consultation charges. In the absence of the prescriptions it is difficult to say whether the amount of the receipts of the, prescriptions included the amount of consultation charges. Mr. Mehta, however, attempted to show by reference to a form of the prescription that the amount of the receipts of prescriptions may represent and include also the amount of consultation charges. But that is a matter entirely in the region of speculation. If it is shown that the receipts from the prescriptions would include an amount of consultation fees charged by Dr. Desai, that certainly cannot constitute a sale of goods within the, meaning of Section 2 (8), but in the absence of any material one can only conclude) so far as this case is concerned, that the amount of the receipts represented by the prescriptions cannot be other than the sale of goods for the purpose of Section 8. This being our view on the materials of the record of this case, we are unable to accept the contention of Mr. Mehta that the receipts of Rs. 6,998 -8 -0 are not taxable in the hands of the applicants. In view of this conclusion, the order which is sought to be revised is clearly right. The application must, therefore, fail and will be dismissed.;