Gopal Krishan Vyas, J. - (1.) INSTANT sales tax revision petition has been filed by the Assistant Commissioner, Special Circle -I, Jodhpur against the judgment and order dated 13.5.2008 passed by the Tax Board, Ajmer in Appeal No. 804/07/Jodhpur, whereby, the learned Tax Board has affirmed the judgment dated 18.12.2006 passed by the Deputy Commissioner (Appeals), Commercial Taxes, Jodhpur, whereby, the first appellate authority set aside the additional demand of tax/surcharge and interest for the difference amount of 4 per cent of tax which is created on the ground that as per Entry No. 176 of the notification dated 22.3.2003, 12% tax is leviable upon oxygen and industrial gases.
(2.) EARLIER , in pursuance of tax assessment order dated 7.3.2005, the respondent dealer deposited tax and surcharge at the rate of 8 per cent for the year 2002 -03; but, later on, demand was created for the difference amount of 4% tax and surcharge and interest on the ground that as per notfn issued by the Government oxygen and industrial gases fall under Entry No. 176, for which, 12 per cent tax is leviable. According to facts of the case, the respondent is producing medicated oxygen gas under licence issued as per the Medicated Oxygen & Drugs Rules, 1945. Use of medicated oxygen is only for the human patients and there is no other commercial use, therefore, the respondent challenges the additional demand created by the petitioner department which is set aside by the Deputy Commissioner (Appeals), Commercial Taxes, Jodhpur in the appeal filed under Section 84 of the Act of 1994. The said order was, however, further challenged by the department by way of filing appeal before the Tax Board. The Tax Board, Ajmer, while following the judgment of the Allahbad High Court, reported in : 21 STC 154, held that medicated oxygen is only used for treatment in hospitals for human patients, therefore, it is medicine, for which, 8 per cent tax is rightly levied earlier and the subsequent additional demand raised by the department is illegal.
(3.) LEARNED Counsel for the petitioner vehemently argued that in view of the express entry in the notfn dated 22.3,.2002, at Entry No. 176, tax at the rate of 12 per cent was to be levied because on the use of the product in question it is a gas which cannot be termed as medicine or drug. Further, it is argued that when specific entry regarding tax rate has been prescribed, then, it has to be accepted in its totality.;