SOUTHERN GAS LTD Vs. STATE OF KERALA
LAWS(KER)-2003-9-31
HIGH COURT OF KERALA
Decided on September 03,2003

Southern Gas Ltd Appellant
VERSUS
STATE OF KERALA Respondents

JUDGEMENT

- (1.) THE Judgment of the Court was delivered by Sivarajan, J. - Whether Medical Oxygen and Nitrous Oxide can be treated as medicines for the purpose of levy of tax under the Kerala General Sales Tax Act, 1963 (for short "the Act") is the question involved in this case.
(2.) THE assessee is the revision petitioner. State is the respondent. The assessment year is 1987-88. The assessee is engaged in the manufacture and sale of Medical Oxygen and Nitrous Oxide. In the assessment for the year 1987-88 the assessee contended that the said two items are liable to be assessed at the rate of 5 per cent under the Notification G.O. (Rt.) No. 242/84/TD. The assessment was originally completed by assessing 'Medical Oxygen' at 5 per cent under the above Notification and 'Nitrous Oxide' at 6 per cent under Entry No. 85 of Schedule I to the Act as it stood at the relevant time. However, the said assessment was reopened under S.19 of the Act on the ground that 'Medical Oxygen' and 'Nitrous Oxide' are liable to be assessed at higher rates. In spite of the objections taken by the assessee, the Assessing Authority passed a revised assessment order, dated 22nd July 1992 (Annexure A) under which 'Medical Oxygen' was assessed at the rate applicable to 'gases liquified or not' at 8 per cent under Entry No. 85 of the First Schedule to the Act which came into force with effect from 1st July 1987. The Assessing Authority took the view that the Notification GO. (Rt.) No. 242/84/TD, dated 2nd April 1984 did not survive after the introduction of Entry No. 85 of Schedule I to the Act. The Assessing Authority also took the view that the subsequent Notification S.R.O.976/89 had effect only from 13th June 1989 and therefore for the period from 1st July 1987 to 13th June 1989 'Medical Oxygen' has to be classified only as a 'gas' as specified in Entry No. 85 of Schedule I to the Act. The contention of the assessee that 'Nitrous Oxide' is a 'medicine' was also rejected by the Assessing Authority by stating that it is sold by the assessee in gaseous form and this also is liable to be assessed at the rate applicable under Entry No. 85 of Schedule I to the Act. In the appeal filed by the assessee the Addl. Deputy Commissioner (Appeals), A.I.T. and S.T., by order dated 20th September 1994 (Annexure B) dismissed the appeal by affirming the order passed by the Assessing Authority. The further appeal filed by the assessee before the Appellate Tribunal also was unsuccessful. Hence this revision.
(3.) IN this revision, the assessee had raised the following two questions of law: "(i) Whether on the facts and circumstances of the case was the Tribunal justified in holding that Medical Oxygen and Nitrous Oxide would fall under Entry 85 and not under Entry 116 (medicines) of the 1st Schedule to the K.G.S.T. Act? (ii) Should not the Tribunal have held that Medical Oxygen and Nitrous Oxide being used in treatment are taxable under the specific entry providing for 'medicines' under Entry 116 of the 1st Schedule to the K.G.S.T. Act?" ;


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