1991 (10) TMI 286 - HC - VAT and Sales Tax

Court rules medical services not subject to sales tax

Dr. Hemendra Surana Versus State of Rajasthan

The court ruled in favor of the petitioner, holding that the services provided by the medical practitioner did not constitute a sale under the Rajasthan ... - Issues:1. Whether the petitioner, a medical practitioner providing technical advice based on X-ray and clinical tests, is liable to pay sales tax for his services without registration with the Sales Tax Department.2. Whether the X-ray film provided to patients constitutes a sale under the Rajasthan Sales Tax Act, 1954.3. Whether the writ petition filed by the petitioner to quash the notice under section 16(1)(a) of the Act is premature.Analysis:1. The petitioner, a medical practitioner, received a notice for not registering with the Sales Tax Department despite providing technical advice based on X-ray and clinical tests. The petitioner argued that he is not a dealer but a service provider, citing precedents like Dr. Golak Behari Mohanty v. State of Orissa. The court considered the nature of the services provided by the petitioner and concluded that the primary object of the transaction was the technical advice, not the transfer of property, thus exempting the petitioner from sales tax liability.2. The court analyzed the definition of 'sale' under section 2(o) of the Act, emphasizing that the X-ray film provided by the petitioner does not constitute a sale as it is primarily intended for medical diagnosis and does not have commercial value. The court relied on previous judgments like National Clinic v. Assistant Commercial Taxes Officer to support the argument that the services provided by the petitioner do not fall under the definition of a sale, thereby exempting him from registration and sales tax liability.3. The court addressed the contention that the writ petition was premature, citing precedents such as In re: Purabachal International and Godrej and Boyce Manufacturing Co. Pvt. Ltd. v. Union of India to support the petitioner's right to challenge a notice if it is void or illegal. The court held that since the petitioner's services did not amount to a sale, remitting the matter back to the sales tax authorities would serve no purpose. Consequently, the court allowed the writ petition, quashing the notice issued to the petitioner under section 16(1)(a) of the Act.In conclusion, the court ruled in favor of the petitioner, holding that his services did not constitute a sale under the Rajasthan Sales Tax Act, 1954, and therefore, he was not liable to pay sales tax or register with the Sales Tax Department. The court also deemed the writ petition as not premature and allowed it, quashing the notice issued to the petitioner.