2009 (2) TMI 793 - HC - VAT and Sales Tax

Surgical gloves - petitioner filed sales tax returns declaring its turnover taxable at eight per cent under entry 145 - the assessing officer assessed the turnover under entry 125 of the First Schedule to the Act which provides for tax at 12 per cent - Held that - The position with regard to examination gloves is different because these items are not earmarked as surgical gloves. It is used for the examination of patients and is not of the quality required for use as surgical gloves. The relative lower value reflects the quality of the item and so much so that examination gloves cannot be treated as surgical gloves. Since examination gloves are made of rubber the petitioner is liable to pay tax on this item as rubber product under entry 125 of the First Schedule to the KGST Act. The S.T. revision is consequently allowed in part to the extent indicated above with a direction to the officer to revise the assessment of turnover of surgical gloves both sterilized and non-sterilized at eight per cent under entry 145 and retain the turnover of examination gloves at 12 per cent under entry 125 of the First Schedule to the KGST Act.

Summary

The High Court of Kerala delivered a judgement in the case of Ramachandran Nair C.N. The petitioner was involved in the manufacture and sale of surgical gloves made of rubber. The petitioner declared their turnover of surgical gloves as taxable at 8%, but the assessing officer assessed it at 12% under a different entry. The petitioner's appeals were unsuccessful, and a revision petition was filed to address the question of the tax rate on surgical and examination gloves.

The court heard arguments from both the petitioner and the government pleader. The petitioner argued that the gloves should be assessed under the 8% tax rate entry as surgical equipment, while the government pleader contended that they should be assessed at 12% under the rubber products entry. The petitioner referenced previous court decisions to support their argument that surgical gloves should be considered surgical equipment, regardless of the material they are made from.

The court ultimately ruled in favor of the petitioner, concluding that sterilized surgical gloves fell under the surgical equipment entry and should be taxed at 8%. Non-sterilized surgical gloves were also considered assessable under the same entry due to their intended use. Examination gloves, however, were deemed to be of lower quality and not suitable for surgical use, thus falling under the 12% rubber products entry. The court allowed the revision in part, directing the officer to revise the assessment of surgical gloves at 8% and examination gloves at 12%.