2002 (8) TMI 823 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to exhibit P2 notice demanding entry tax for surgical tables treated as furniture under the Kerala Tax on Entry of Goods into Local Areas Act.
2. Classification of medical equipments as furniture for entry tax purposes.

Analysis:
1. The petitioner, engaged in manufacturing medical equipments, challenged exhibit P2 notice demanding entry tax for surgical tables treated as furniture under the Kerala Tax on Entry of Goods into Local Areas Act. The items in question were detained at a sales tax check-post in Kerala while being transported to hospitals. The petitioner argued that the items were medical equipments used for surgery, not furniture. The Olympus 2000 Mobile C-Arm Multi Procedures Table was described as power-operated, remote-controlled, and equipped with various features essential for surgery. The petitioner contended that these high-value medical equipments were not furniture but specialized tools used exclusively by hospitals for surgical procedures.

2. The petitioner relied on precedents such as the Allahabad High Court's decision in Imperial Surgico Industries case, which held that hospital equipments should not be classified as furniture. Additionally, decisions from the High Courts of Bombay and Gujarat were cited, where dental chairs were not considered furniture. On the other hand, the Government Pleader referred to a Kerala High Court decision involving ordinary hospital furniture classified as steel furniture. The Madras High Court's ruling on specially designed furniture for factory use was also mentioned. The judgment emphasized that the popular meaning of the term furniture should be considered, based on how traders and consumers perceive the items. It was clarified that while some hospital furniture may be categorized as furniture, specialized surgical tables with electronic accessories do not fall under this classification.

3. The court held that the surgical tables in question, with their modern electronic accessories and specialized functions for surgery, did not fall under the category of furniture as per the Entry Tax Act. The judgment clarified that not all items used in hospitals can be considered furniture, distinguishing between ordinary hospital furniture like tables and chairs and specialized medical equipments like the surgical tables in question. As a result, the exhibit P2 notices demanding entry tax were quashed, and the original petitions were allowed, declaring that the surgical tables did not attract entry tax. The court dismissed a related order on C.M.P. No. 6587 of 2002 in one of the petitions.

In conclusion, the judgment addressed the challenge to entry tax classification for medical equipments as furniture, drawing on legal precedents and the specific characteristics of the items in question to determine their classification under the law.