MEDINOVA DIAGNOSTIC SERVICES Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) PETITIONER is a Diagnostic center rendering the services of laboratory test, viz. , Bio Chemistry, clinical pathology, Micro-biology, etc. , notice dated 7. 11. 1989 was issued to the petitioner under Section 23 of the Karnataka Tax on entry of Goods Act, 1979, in respect of purchase of X-ray unit from outside India, for liability under the Act. It was also mentioned that the goods which are imported by the petitioner are not scheduled goods, and x-ray unit is an industrial machinery, and the petitioner was considered liable, The receipts for developing X-ray for the customers was considered liable for works contract. The petitioner filed his objections to the notice. Thereafter, in the endorsement dtd. 17. 11. 1989 issued by the Deputy Commissioner of Commercial Taxes, it was found that the contract of X-ray photos is a works contract and under Section 2 (viii) a person who is engaged in the business of transfer of property in goods involved in the execution of works contract is a dealer. It is pointed out that since there are not that 75 persons in the centre and the X-ray machinery is an industrial machinery, the petitioner is liable for Entry Tax at 2% for the machines purchased during 1987-88 as per Entry 17 of the Karnataka Tax on Entry of Goods act.

(2.) THE submission of the Learned Counsel for the petitioner is that the petitioner is a service center and is not carrying on any activity of transfer of property in goods involved in the works contract, and thus the petitioner is neither a dealer under the K. S. T. Act nor is liable for tax under the works contract.

(3.) LEARNED Government Pleader stated that in the case of GOLAK BIHAR MOHANTHI v. STATE OF ORISSA (1974) 33 STC 514 the Orissa High Court has held that the transaction between the patient and a rediologist is a contract of work and labour. It is on this basis, it is submitted that it amounts to works contract.