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2010 DIGILAW 766 (PNJ)

MITTAL DISTRIBUTORS v. STATE OF PUNJAB

2010-02-02

ASHUTOSH MOHUNTA, MEHINDER SINGH SULLAR

body2010
JUDGMENT ASHUTOSH MOHUNTA, J. - The appellant has filed this appeal under section 68 of the Punjab Value Added Tax Act, 2005 (hereinafter referred to as, "the PVAT Act, 2005") challenging the impugned order dated October 6, 2006 (annexure A6) passed by the VAT Tribunal, Punjab. Briefly the facts of the case are that the appellant is engaged in the business of purchase and sale of diagnostic film and medical X-ray films. It is the case of the appellant that on the sale of the aforementioned diagnostic film and medical X-ray films it is charging four per cent VAT being medical equipment and devices for all intents and purposes. According to the appellant, the aforementioned items fall under serial No. 31 of Schedule B to the PVAT Act, 2005. The items falling under serial No. 31 of Schedule B to the PVAT Act, 2005 are reproduced as under : ---------------------------------------------------------------- S. No. Name of the commodity ---------------------------------------------------------------- 31 Drugs and medicines including vaccines, syringes and dressing, medicated ointments produced under drug licence, light liquid paraffin of IP grade, medical equipment/devices and implants. ---------------------------------------------------------------- The appellant filed an application under section 85 of the Punjab VAT Act seeking determination of the question "whether goods diagnostic films and medical X-ray films fall under item No. 31 of Schedule B to the PVAT Act, 2005 ?" The Excise and Taxation Commissioner, Punjab, vide order, annexure A4, held that diagnostic films and X-ray films are not covered under item 31 of Schedule B appended to the PVAT Act, 2005 as these are neither medical equipments/devices nor implants and, hence, these are taxable at 12.5 per cent and not at four per cent. The appellants filed an appeal before the VAT Tribunal, Punjab, which is also dismissed vide order (annexure P6). The question of law which has been raised before this court is "whether the goods diagnostic film and medical X-ray film fall under item 31 of Schedule B and therefore are taxable at four per cent ?" The learned counsel has submitted that the diagnostic films and medical X-ray films would be covered by the word "devices" as mentioned in item 31 and, hence, would be taxable at four per cent. Counsel for the appellant has referred to the dictionary meaning of the word "device" as is appearing in the Oxford Dictionary which is as under : "1 apparatus, appliance, contraption, contrivance, gadget, implement, instrument, invention, machine, tool, utensil. 2 dodge, expedient, gambit, gimmick, manoeuvre, plan, ploy, ruse, scheme, stratagem, stunt, tactic, trick, wile. 3 badge, design, figure, logo, motif, sign, symbol, token." It is further contended that the items are associated with tax in common parlance. It is contended that the word "device" means something invented and constructed for a special purpose and as both the diagnostic films and X-ray films are meant for special purposes, hence, the same would be covered by the word "device" and as such the aforementioned items being purchased and sold by the appellant would be fully covered under items at serial No. 31 of Schedule B of the PVAT Act, 2005. On the other hand, counsel for the State has argued that by no stretch of imagination the diagnostic films and X-ray films being sold by the appellants can be said to be covered by items at serial No. 31 of Schedule B to the PVAT Act, 2005. The learned counsel has further referred to Schedule C to the Bengal VAT Act wherein a list of goods liable to tax at four per cent has been given against entry No. 90. X-ray films and other diagnostic films have been given under the Schedule and brought under tax at four per cent. Item at serial No. 48 of the same Schedule reads "medical equipment, devices and implants". It is submitted that as there are two separate independent entries in Schedule C to the Bengal VAT Act, it clearly shows that X-ray films and diagnostic films are not covered under entry 48 (medical equipment, devices and implants). We have heard the counsel for the parties at length. A perusal of Schedule C to the Bengal VAT Act clearly shows that against entry No. 90, X-ray films and other diagnostic films have been included and are liable to tax at four per cent whereas item 48 of the same Schedule reads "medical equipment, devices and implants". Hence, it is clear that there are two separate independent entries in Schedule C to the Bengal VAT Act. Hence, it is clear that there are two separate independent entries in Schedule C to the Bengal VAT Act. If medical equipment, devices and implants were to be covered against entry No. 90, then there was no point in making another independent item No. 48 of the same Schedule. This clearly shows that there was a conscious decision by the State of Bengal to provide separate entries for X-ray films and other diagnostic films on the one hand and medical equipment, devices and implants on the other hand. It is, thus, clear that the X-ray films and diagnostic films being purchased and sold by the appellants are not covered under items at serial No. 31 of Schedule B to the PVAT Act, 2005. By no stretch of imagination the same can be included under the word "device" as mentioned under items at serial No. 31 of Schedule B to the PVAT Act, 2005. For the foregoing reasons, it is held that the goods "diagnostic films and medical X-ray films" would not fall under items at serial No. 31 of Schedule B of the PVAT Act, 2005 and, hence, would not be taxable at four per cent but the same would be taxable at the rate of 12.5 per cent. We find no infirmity in the order passed by the Punjab VAT Tribunal and, accordingly, the appeal is dismissed.