STATE OF MADRAS Vs. SATHU V NARAYANASWAMI PILLAI

JUDGEMENT

(1.) THESE cases relate to three assessment years 1959-60, 1961-62 and 1962-63 and arise out of a common judgment rendered by the Tribunal. The respondent who is the same in all these three cases is an ayurvedic medical practitioner and he has been selling medicines and medicinal oils as also tooth-powder with the name "Kalnar Perpati". The taxes and the penalty in respect of each of the years levied by the assessing authority are set out below : ----------------------------------------------------------------- Assessment Taxable Tax levied Penalty levied year turnover ----------------------------------------------------------------- 1959-60 254.46 15.27 22.91 1960-61 15, 834.16 335.68 503.92 1961-62 31, 644.34 670.86 1, 006.29 1962-63 31, 199.34 661.39 992.09

(2.) THE assessing officer took the view that the sales of the above articles by the respondent are liable to sales tax and, therefore, proceeded to assess the respondent on the basis of his best judgment after rejecting the turnover shown in the books of account of the respondent. According to the respondent, all the above articles sold by him were medicinal preparations supplied only to his patients on the prescriptions issued by him and not to any other persons, and that as such, he is entitled to the benefit of the notification under section 17 exempting sales of medicines by every medical practitioner owning dispensaries and dispensing medicines to his patients only, from the payment of tax from 1st April, 1939. THE assessing officer rejected the above contention holding that the respondent is found to have sold medicines in certain cases to outsiders and that, therefore, he is not entitled to the benefit of the exemption.So far as the account books are concerned, the assessing officer was not inclined to accept the same and proceeded to make the assessment on the basis of certain statements made by the respondent in the course of the assessment proceedings. THE assessing officer also dealt with the medicinal oils as edible oils and subjected the same to 3 per cent. at single point.

(3.) IN these tax cases filed by the revenue, it is contended that the view of the Tribunal that the respondent is entitled to the benefit of the exemption set out above is not correct and that, in any event, the setting aside of the entire assessment orders in respect of the three years is not justified. We are not able to accept the first contention that the respondent is not entitled to the benefit of the notification referred to above in respect of sales of medicinal preparations. The Tribunal has specifically found that the respondent has supplied medicines on prescriptions to his patients from the dispensary and that there has been no sale of medicines to outsiders. On this finding, we are of the view that the respondent is entitled to the benefit of the G.O., and the Tribunal is right in giving the benefit of the exemption to the respondent in respect of the medicinal preparations.On the other question as to whether the Tribunal was justified in setting aside the entirety of the assessment orders, it is pointed out by the learned Government Pleader that the sales of tooth-powder are taxable under the Act and that the Tribunal itself has upheld the assessment at 2 per cent. on the sales of tooth-powder but it has set aside the assessment on that turnover only on the ground that the taxable turnover was less than Rs. 10, 000. According to the revenue, the Tribunal has not properly understood the scope of section 3(1) read with the definition of "total turnover" in section 2(q).