Composite medical treatment is not a sale: stent or valve implantation in hospital care was held outside VAT liability.

Implantation of a stent or valve during hospital treatment was treated as part of a composite medical procedure, not as a separate contract for sale of goods. Article 366(29-A) of the Constitution was held inapplicable because hospital services do not fall within deemed-sale categories, and the mere inclusion of charges for drugs or consumables in the bill did not convert the treatment into a sale. The Court applied the principle that, outside deemed-sale transactions, a sale arises only where the parties intend separate rights in goods. On that basis, implantation of the stent or valve did not amount to a sale under section 2(ac) of the U.P. Value Added Tax Act, 2008, and the tax demand failed.

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Issues: Whether the implantation of a stent or valve in an indoor patient during a surgical procedure in a hospital involves a sale under section 2(ac) of the U.P. Value Added Tax Act, 2008 and is consequently taxable.

Analysis: The transaction was examined as a composite arrangement for medical treatment, not as a contract for sale of goods. The deeming fiction in Article 366(29-A) of the Constitution of India was held inapplicable because hospital services do not fall within the categories of deemed sale. The substance of the transaction was the performance of a medical procedure, and the implantation of the stent or valve was only an intrinsic and integral part of that procedure. The mere recovery of charges in the bill, including the cost of drugs and consumables, did not convert the medical procedure into a sale. The Court applied the principle that, outside the transactions covered by Article 366(29-A), a sale can be found only if the parties intended separate rights arising from a sale of goods.

Conclusion: The implantation of a stent or valve in the course of hospital treatment does not amount to a sale within section 2(ac) of the U.P. Value Added Tax Act, 2008, and the tax demand on that basis was unsustainable.

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