Hospital categorisation change requires a live categorisation; cancellation ends the ability to seek conversion.

A request to change hospital categorisation under Notification No. 64/88-Cus. is maintainable only while the existing categorisation remains in force. Once the categorisation has been cancelled, and no interim order stays that cancellation, there is no subsisting category to convert. A challenge to the cancellation does not by itself preserve the categorisation for this purpose. The later Supreme Court ruling was treated as binding and followed in preference to the earlier view relied on by the hospital, so conversion from category 2 to category 1 after cancellation was held unavailable.

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Issues: Whether the appellant hospital could seek change of categorisation under Notification No. 64/88-Cus. after its earlier categorisation had been cancelled.

Analysis: The dispute turned on the effect of the cancellation of the appellant's categorisation. The controlling principle taken from the later Supreme Court decision was that a request for change in categorisation can be made only while a categorisation is still in force. Once the categorisation is cancelled and there is no interim order staying that cancellation, the hospital is no longer in a live category and there is nothing subsisting to change. The fact that the cancellation was challenged did not alter the position because the cancellation had taken effect. The Court also treated the subsequent Supreme Court ruling as binding and followed it over the earlier decision relied upon by the appellant.

Conclusion: The appellant was not entitled to seek conversion from category 2 to category 1 after cancellation of its categorisation, and the challenge failed.

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