9911796707
TMI Blog2003 (9) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... icine . Since medical oxygen and nitrous oxide fall under entry No. 116 relating to medicine it is specifically excluded from entry No. 85 of the First Schedule to the Act. Though the assessee had raised a contention that even after the substitution of entry No. 85 with effect from July 1, 1987, the notification of 1984 has application, it cannot be accepted in view of the fact that the notification of 1984 was issued in the context of entry No. 85 of the First Schedule to the Act as it stood at that time and the rate of tax was at 7 per cent and the notification reduced the tax from 7 per cent to 5 per cent. Since under the new entry the rate of tax was 8 per cent, necessarily, the earlier notification has no application. Probably, it is in this view, the Government thought of giving relief by issuing Notification S.R.O. No. 976/89 granting reduction in the rate of tax in respect of medical oxygen from 8 per cent to 6 per cent. These notifications at the most can only show that the Government entertained the view that medical oxygen will fall under entry No. 85 of the First Schedule to the Act. Since this view is against the assessee it cannot bind the assessee if in law medical o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly as a "gas" as specified in entry No. 85 of the First Schedule to the Act. The contention of the assessee that "nitrous oxide " is a "medicine" was also rejected by the assessing authority by stating that it is sold by the assessee in gaseous form and this also is liable to be assessed at the rate applicable under entry No. 85 of the First Schedule to the Act. 3.. In the appeal filed by the assessee the Additional Deputy Commissioner (Appeals), Agricultural Income-tax and Sales Tax by order dated September 20, 1994 (annexure B) dismissed the appeal by affirming the order passed by the assessing authority. The further appeal filed by the assessee before the Appellate Tribunal also was unsuccessful. Hence this revision. 4.. In this revision, the assessee had raised the following two questions of law. "(i) Whether, on the facts and circumstances of the case, was the Tribunal justified in holding that medical oxygen and nitrous oxide would fall under entry No. 85 and not under entry 116 (Medicines) of the First Schedule to the KGST Act? (ii) Should not the Tribunal have held that medical oxygen and nitrous oxide being used in treatment are taxable under the specific entry providing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Government Pleader submitted that going by the common parlance theory also "medical oxygen" and "nitrous oxide" both being gases, are understood only as gases and the assessing authority and the appellate authorities have rightly found that both the above items are liable to be assessed at the rate applicable to gases under entry No. 85 of the First Schedule to the Act. 8.. We have considered the rival submissions and also perused the orders of the three authorities. The assessing authority has considered this question as follows: "From July 1, 1987 gases liquefied or not are taxable at 8 per cent as per entry No. 85 of the First Schedule. The S.R.O. No. 976/ 89 has effect from June 13, 1989 only. Hence from July 1, 1987 up to June 13, 1989, medical oxygen can be classified only as a gas as specified in entry No. 85 of the First Schedule. Nitrous oxide is not a medicine to be assessed at 6 per cent. The nitrous oxide sold by the assessee is in gaseous form and hence this also can only be an item covered by entry 85." 9.. The first appellate authority had adverted to the contentions raised by the assessee on the basis of the notification issued by the Government both before Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gases liquefied or not other than those specified elsewhere in the Schedule are brought to tax at 8 per cent. So far as clarifications/ circulars issued by Government are concerned, they merely represent their understanding of the statutory provisions but they are not binding on the courts. There cannot be any estoppel against the statute. Law is what is declared by the Supreme Court and the High Court as to what a particular provision of statute say and not for the executive (Bengal Iron Corporation v. Commercial Tax Officer [1993] 90 STC 47 (SC); AIR 1993 SC 2414). 11.. According to us neither the assessing authority nor the two appellate authorities had considered the question in the proper perspective. Of course, we find that the first appellate authority has made an observation to the effect that entry No. 85 of the First Schedule to the Act is a special provision taking in all gases and the entry "medicine" is only a general entry. But we do not find any proper consideration on this question in the said order also. 12.. As already noted, according to the assessee "medical oxygen " and "nitrous oxygen" are medicines under entry No. 116 of the First Schedule to the Act. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of the word "medicine" thus: "Medicine" or "drug" includes- (i) all medicines for internal or external use of human beings or animals, (ii) all substances, intended to be used for or in the diagnosis, treatment, mitigation or prevention of diseases in human beings or animals, (iii) all substances intended to be used for or in the maintenance of public health, or the prevention or control of any epidemic disease among human beings or animals, (iv) insecticides, germicides, fungicides, weedicides and all other substances intended to be used for the protection or preservation of plants. (v) all chemical substances which are ordinarily used as intermediates in the preparation or manufacture of any of the medicines or substances above referred to. Patents Act, 1970, section 2(l)." A Dictionary of Modern Legal Usage by Bryan A. Garner defines the word "Medicine" as follows: " 'Medicine', 'medication' 'medicament'-Medication has traditionally meant 'the action of treating medically', but, through SLIPHOD EXTENSION, has recently come to mean 'a medical substance, medicament' a sense that careful writers avoid. Medicament (= a substance taken internally or used externally in curati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is as to which of the two is the special entry, for the special entry will exclude the general entry. [Importex International (P) Ltd. v. State of Kerala [1991] 81 STC 351 (Ker) and Deputy Commissioner of Sales Tax v. Food Specialities Ltd. [1991] 82 STC 298 (Ker)]. The Karnataka High Court in Indian Oxygen Ltd.'s case [1990] 79 STC 351, took the view that "medical oxygen" is distinct from "industrial oxygen". Entry No. 85 deals with all kinds of gases. If as a matter of fact a particular category of gas, in the instant case, "medical oxygen", has got the exclusive user as a medicine and if there is an entry relating to medicine, the item so carved out from the general entry relating to "gases" will have to be brought under the entry medicine and it has to be assessed under that entry. Here, as we have already noted, entry No. 85 deals with all kinds of gases, "medical oxygen" is one of the items of gases dealt with in entry No. 85. However, "medical oxygen" being medicine, certainly, it has to be assessed as a special item falling under the entry relating to medicine. Thus "medical oxygen" and "nitrous oxide" are to be treated as a special category falling under entry medicine ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
