Composite medical treatment and VAT: implantation of stents or valves during surgery is not a taxable sale under U.P. VAT law.

In a composite hospital procedure, the mere recovery of charges for surgery, medicines and consumables does not by itself create a taxable sale of implanted stents or valves. Applying the controlling Division Bench precedent, the Allahabad HC noted that implantation of a stent or valve during surgery remains part of medical treatment and does not fall within "sale" under Section 2(ac) of the U.P. VAT Act. The contrary treatment in the impugned assessment orders could not stand against that binding view, and the assessment orders were therefore liable to be quashed, while the assessing authority retained liberty to complete the final assessment on all relevant material.

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Issues: Whether the use of stents, valves or medicines during a surgical procedure in a hospital amounts to a sale within the meaning of Section 2(ac) of the U.P. VAT Act.

Analysis: The disputed temporary assessment orders treated the implantation of stents and valves, along with medicines and other consumables charged in the hospital bill, as a taxable sale. The controlling Division Bench view held that recovery of charges for surgery and consumables in a composite medical procedure does not convert the implantation of a stent or valve into a sale. The contrary view taken in the impugned orders could not prevail in the face of that binding precedent, which had neither been overruled nor held to be bad law.

Conclusion: The use of stents or valves during surgery does not amount to a sale under Section 2(ac) of the U.P. VAT Act, and the impugned assessment orders were liable to be quashed.

Final Conclusion: The writ petition succeeds on the strength of the earlier Division Bench ruling, and the assessing authority remains free to decide the final assessment on all relevant material.

Ratio Decidendi: In a composite medical treatment transaction, the mere recovery of charges for surgery, drugs or consumables does not by itself create a taxable sale of implanted medical devices.

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