SANJOSE PARISH HOSPITAL Vs. COMMERCIAL TAX OFFICER, CHAVAKKAD

JUDGEMENT

(1.) The above cases - Writ Appeals, Revisions and Writ Petitions - have been placed before us by virtue of a reference order dated 13.04.2018 passed by a Division Bench of this Court. The question referred for consideration is as to whether the medicines supplied, implants carried out, the consumables used and surgical tools exclusively used in a particular procedure, as part of treatment of patients in a hospital, the price of which is recovered by way of bills from the patients are 'sale of goods' as contemplated by the legislation levying such tax; herein the Kerala Value Added Tax Act, 2003 [for brevity "KVAT Act"]. The Division Bench was of the opinion that though under the VAT Act the hospitals may require registration as a dealer since they have Pharmacies through which medicines and other components required for the treatment are sold; not only to in-patients but also to out-patients, such transactions would not be exigible to tax under the sales tax enactment as it forms part of services rendered by the hospital. The Division Bench, which made the reference, relied on Bharat Sanchar Nigam Ltd. and Another Vs. Union of India and Others [(2006) 3 SCC 1] to take a different view from that held by this Court; by Benches of varying strength of quorum. The difference of opinion, so arising in the mind of the Division Bench being in conflict with a number of decisions of this Court on the very same aspect, the last of which also noticed Bharat Sanchar Nigam Ltd.; but found the dictum therein to have no relevance to the particular transactions as carried out by the hospitals, a reference was necessitated.

(2.) Some of the petitioners are also concerned with the tax leviable on the consumables including medicines as supplied by the Pharmacies to out-patients who are not admitted to the hospital for a definite medical treatment or surgical procedure. There being no view expressed on that aspect nor a reference made by the Division Bench, we would not look into that aspect. This would have to be necessarily considered by a Division Bench; whether the answer we give in the reference, is in favour of the assessee or against on the other aspect.

(3.) We need not refer to the individual facts to answer the reference and what we broadly stated as to the legal issue arising, would encompass the essential bare facts. We need only notice the various decisions of this Court, the Honourable Supreme Court and the various other High Courts to answer the question, which is purely on law; whether the drugs, implants and other consumables used in the treatment of in-patients in a hospital could be deemed to be 'sale of goods' under Art. 366(29A)(f) of the Constitution of India.