Common parlance classification test places specialised blood bank equipment within medical equipment entry, excluding residuary taxation.

Blood bank equipment specially designed for collection, storage, processing, separation and thawing of blood was held to fall within the specific entry for "Medical Equipments, Devices and Implants" under Entry 61 of the III Schedule to the Karnataka Value Added Tax Act, 2003. Applying the common parlance and trade parlance tests, the Court treated blood collection monitors, storage refrigerators, deep freezers, platelet agitators, plasma expressers and cryobaths as integrally connected with diagnosis and treatment in hospitals and blood banks. The distinction sought to be drawn between blood bank equipment and medical equipment was rejected as artificial, and the residuary entry was held inapplicable.

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Issues: Whether blood bank equipment such as blood collection monitors, blood storage refrigerators and deep freezers, platelet agitators with incubators, plasma expressers and cryobaths are classifiable as "Medical Equipments, Devices and Implants" under Entry 61 of the III Schedule to the Karnataka Value Added Tax Act, 2003, or under the residuary entry at the higher rate of tax.

Analysis: Classification under fiscal entries must be determined by the common parlance or trade parlance test. The goods in question are specially designed for blood collection, storage, processing, separation and thawing, and are integrally connected with diagnosis and treatment in hospitals and blood banks. Their specialised use does not justify treating them as mere refrigerators or storage equipment outside the scope of the specific entry. The distinction drawn by the Commissioner between "blood bank equipments" and "medical equipments" was found to be artificial and unsustainable. In interpreting the KVAT entries, the specific entry for medical equipment prevails over the residuary entry where the goods fall within its broad scope.

Conclusion: The goods are covered by Entry 61 of the III Schedule as medical equipments, devices and implants and are taxable at 4%, not under the residuary entry.

Ratio Decidendi: Goods specially designed and integrally used in medical diagnosis, treatment and blood-bank operations are to be classified according to their commercial identity in common parlance, and not diverted to the residuary entry merely because they have specialised storage or processing functions.

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