2009 (5) TMI 907 - HC - VAT and Sales Tax

Summary

Issues involved: Sales tax revision petition challenging additional demand of tax on medicated oxygen gas under Entry No.176 of notification dated 22.03.2003.

Summary:
The Assistant Commissioner filed a sales tax revision petition against a judgment affirming the setting aside of additional tax demand on medicated oxygen gas. The respondent, a dealer producing medicated oxygen for human patients, challenged the demand, arguing it was illegal. The Deputy Commissioner (Appeals) and the Tax Board held that medicated oxygen is used for treatment and is considered medicine, thus 8% tax is rightly levied. The petitioner argued that as per the notification, 12% tax should be levied on the product. The court noted that medicated oxygen is produced under specific rules for saving human lives, and therefore, should be exempt from high taxes. The court agreed with the view that different rates of tax can be applied based on the purpose of use. It was concluded that for medicated oxygen, taxed as medicine, the 8% rate is appropriate, considering its critical use in saving human lives. The court dismissed the revision petition, stating no question of law is involved, emphasizing the importance of not burdening citizens with unnecessary taxes when it comes to matters related to saving lives.

The judgment highlights the importance of considering the critical use of medicated oxygen for human patients in hospitals, leading to the decision that the 8% tax rate is appropriate.