Medical equipment classification turns on patient-care function, so hospital beds and OT lights were treated differently from ordinary furniture.

Hospital beds and OT lights were held to fall within the "medical equipment" entry because the qualifying word "medical" requires a purposive, functional test focused on diagnosis, treatment, cure or patient care. On that basis, items specially designed for patient care were classified under Entry 111 of Schedule IV and not as mere furniture. Bedside cabinets and lockers, although useful in a hospital environment, did not directly or indirectly partake in diagnosis or treatment and could serve ordinary furniture needs, so they were placed in the residuary entry of Schedule V. The assessment orders were set aside in part and fresh assessments were directed on that classification basis.

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Issues: Whether hospital beds and OT lights sold to hospitals fall within Entry 111 of Schedule IV as medical equipment, while bedside cabinets and lockers fall under the residuary entry of Schedule V of the Andhra Pradesh Value Added Tax Act, 2005.

Analysis: The term "medical equipment/devices and implants" was not defined in the statute, so the Court adopted a strict yet purposive construction of the entry. It held that the qualifying word "medical" controlled the entry and that the relevant test was whether the goods partake in diagnosis, treatment, cure or care of patients directly or indirectly. Applying that test, hospital beds and OT lights were found to be specially designed for patient care and treatment, and therefore not to be treated as mere furniture. Bedside cabinets and lockers, though useful in a hospital setting, were found not to partake in diagnosis or treatment and could also serve as ordinary furniture.

Conclusion: Hospital beds and OT lights are covered by Entry 111 of Schedule IV, while bedside cabinets and lockers fall under the residuary entry of Schedule V.

Final Conclusion: The assessment orders were set aside in part and fresh assessments were directed on the basis of the above classification, with the petitions succeeding only to that extent.

Ratio Decidendi: Where a taxing entry uses the expression "medical equipment", the goods must be classified by their principal function in diagnosis, treatment, cure or care of patients, and not by their general similarity to furniture or other non-medical articles.

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