GLOBE SURGICALS v. 1. The Commercial Tax Officer

in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of collection of disputed tax pursuant to the order of assessment of i', value added tax passed in Form 305, dated 30.8.2008 by the Commercial Tax Officer, Barkatpura C rcle, Hyderabad pending disposal of il-e writ petition. Counsel for the Petitioner: SRI A.V.A.SIVA KARTIKEYA, tlE:P. FOR SRI S.CHAKRAPANI Counsel for the Respondents: SRI T.CHAITANYA KIRAN, A,GP, REP. FOR SPL. GP FOR STATE TAX The Court made the f ollowing: ORDER TI{E IIONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOUIIABLE SRI JUSTICE SUDDALA CHALAPATHI RAO W.P.No.20716 OF 2008 ORDER, (pcr I lott'hlc Sri Justitt' l'.Sum Kosh.tl lleard Mr.A.V.A.Sir a Karlikcya, fearned counsel representing Mr.S.Chakrapani, leamed counsel 1br thc petitioner and Mr.T.Chaitartya Kiran, learncd counsel appearing lor respondcnts. Perused the record.

2. 1'he present is a Writ Pctition which has been filed by the petitioner seeking quashrncnt of assessment order, dated

10.08.2008, passcd by the 2'"r rcspondent under the provisions of the Andhra Pradesh VAI'Act (as it then was).

3. The contention of the petitioncr prirnarily is that the petitionels are engaged in business of trading ortl-ropedic or fracture appliances and artificial joints and they are the registered dealer under the Cornmercial Tax Act-

4. According to the petitioner, the products which the petitionels are trading falls under Entry 2 of the Schedule I of the Andhra Pradesh VAT ACl' nou'the Tclangana VAT Act which is termed as "orthopedic or lractures appliances and artificial 2 EffiE -i .r,:. .joints/implants used by handicapped pcr.sons". r',ccording to the petitioner thc tloducts u,hich thcv are dealing arc .rrclusiveir those rvlrich arc ntcant fbr thc handicappcd persons and t rcrelbre thcv are cntitled for tlt: exemprion fiont payment ol'\'A'I Lrr cler. Section l7 o1' the Act.

5. lt was also thc contention o f tlie per r t ioner- that the govemment itself had specilrcally published a rrr.tihcation vide G.O.Ms.No.l6l5, datcd 31.08.1005, rvhcrcir.r ther h rr.c inrroclrced certain items rvhich would fall under Schcdule I ir annexurc I of thc said notillcation, it specilically lays dou,n e i.rlrt (0li) itcrns which would get added to Entry 2 of Schedute I r rrd out ol rl,rose cight (08) items is onc hcing Orthopcdic ur tiacrr-rr.t rrpplianccs and thc second one is arlificial joints. 'l'he petitioner prinriLr.i[y. is sceking excmption under Section l7 ol'the Act to the pr()(lL cts u.hich fall under those category.

6. lt was also the categorical contention of thc lcarned coLrnsel for the petitioner that those iterns which thc petitio r(:r.s arc tracling and which do r-rot fall under the aforesaid tu,o cate-eories, the petitioner has bcen paying the regular taxes withour .iril. 3

7. The grievance of the petitioner is that though this notification is published by the government on 31.08.2005, even after couple of years the lespondent authorities are still r-rot properly appreciating the exemption which the pctitioner secks for in terms of the aforesaid G.O.Ms.No. 1615, dated 31.08.2005, rather they initiating assessment proceedings on the aforementioned goods which according to the petitioner lalls under Entry 2 of the Schedule I to be one which falls undcr F.ntry I l l of Schedule IV which was insefted w'ith eflt-ect fi'om 01.09.2005

8. Learned counsel appearing lor the petitioner also have produced two govemment orders vide dated, 08.08.2006 and the other dated 22.05.2009. Both of whictr perlaining to the orthopedic or fracture appliances and both these products to be one which lalts under Entry 2 ol Schedute I being entitled for the exemption under Section 7 of the Act. g. In addition, the leamed counsel lbr the petitioner also relies upon the decision of the Division Bench of this High Court, decided on31.07.2024, in W.P.No.l505 of 2019 and batoh matters; where infact, during the course of the proceedings, the leamed Assistant Govertment Pleader representing le amed Special Government 4 Pleader fol the l)epartrnent itself has conceded the h:t that artiflcial \ .joints ale one which falls under Entry 2 of Schedul,: I and have also conceded ttrat the artificial joints are only rneant urd invcntcd for the use of persons with disabilities,4'randicapperl and thus, the learned Assistant Govemment Pleadcr representine Ieamed Special Govemment Pleader accepted for the quashment o{' t}-re asscssment order and to hold that the orthopedic or fiacture app.ianoes and the artificial joints which the petitioners tr-ade in, beinu r:xer.r,rpted trom payment of VAT and being the products which falt rnder Entry 2 of Schedule I.

10. Per contra, leamed Assistant Goverrrnent pleader representing leamed Speciai Government pleader c ontendcd that once when the government had inserted Enrry I I I ir Schedule IV, the products which the petitioners were trading als: ivould bc one which would tall under Schedule IV Entrv 1 I l. 1 l. According to the leamed State Counsel. the naLurc of products traded by the petitioners also would clne uncler the category of implants that which is reflected undcr. Schedule IV Entry I I I and since this Entry 1'1 1 of Schedule lV have been inserted subsequent to Entry 2 of Schedule I, it woulc be this Entry 5 which would prevail and would supersede the earlier Entries and I the G.O. which was issued earlier.

12. Leamed Assistant Govcrrunent I)lcader representing leamed Special Goven-tment Pleader appearing fbr the rcspondent relied upon the decision of the Hon'ble Supretne Court in the casc of Reliance Trading Company v. Slate of Keralul , trying to cmphasis that where there are two Entries that is the general and other specific Entries it would be thc specific Lrlntry lvhich u'ould prevail over the general Entry. Referring to the said j udgment, the leartred Assistant Govemment Pleader representing learned Special Govemment Pleader submitted that Entry 2 is a general Entry which was there in the statute, but the inseftiou of Entry I I I in Schedule IV being a specific and tnore rvider Entry ar.rd therefore if the said Entry has been taken into consideration lbr taxing by the State Tax Authorities, the impugned order cannot be said to be in any manner bad and prayed tbr the dismissal of the rvrit petition.

13. Having heard the contentions putforth on either side and on perusal of record it would relevant at this juncture to rcproduce the '[zooo] ug stc :zr (ren) 5 3 { relevant portion of the G.O.Ms.No.1615, dated 31.(-8.2005. issued by the government G.O.l\is.No. 1615, dated 3 1.08.2005; ''ln ercrcjsc ol thc powers conlcrred under sr.rb-sccrion (2 ) ,)l Se( lio I 70 of rhe Andhra l,r.adesh Value Arl.l..l \ct. 2005, thc (iovernor of Andhra Pradesh in superscs;ion o,i G.O.Ms.No-i98, Revenue (C'l.ll) I)epailu)ent. Dt.3 1.0j.2005 and G.O.Ms.No.490, Revenue r( T.II) l)eparlment. Dt. I 5.04.2005, her.cby order rhat thL I ISN Codes ir.L respcct of thirteen (13) items in Schedult I anci seventy (70) irems in Schedule-lV shall be as specilr,:d in Annexure-l and Amcxurc-Il respectivel), appentlcd rr this noli fic:ll ion". 'fhis lotitrcation shall comc into forcc on and lrrrnr 0 r.09.2005.

11. In continuation to that it would be relevant to rake note ol-the Annexure-I of the G.O.Ms.No.l615, dated 31.0g..t(,r05, issued by the governmenl l'eferring the Entry 2 also reads as Lrnc er: Sl.No. Entry No. in Sched ule 2 2 ANNEXURtr-I SCHEDTJLE - I Descriplion of Goods fISN (lode Agricultural implements manually operare,l or animal driven Aids and implements used by handicappecl pcrsons l. Orthopedic or fracture applianccs 2. Artificial joints i. Hearing aids, excluding parts and accessor.ic r -1. Other (parts and accessories) 5. Braille typewriters (electric) 6. llraille typewriters (non-electric) 7. Wheel chairs for invalid (not mechanic rl r propelled). ll. Wheel chairs for invalid

9011.10 e02l l I 9021 .40 9021.90 t'i.1(r9.20.l0 u.169.i0.l0 8713.10 t0 871 3.90. 10

2..' ,/' 7

15. So far as reference rnade by the learned Assistant Govemment Pleader representing learned Special Govemment Pleader to Entry 111 in Schedule tV is concerned which again for ready reference is reflected hereinundcr 1 I 1. Medical equipments / dcvises and in'rplants

16. A ptain reading of the afbrementioned matci ial clearly indicates that the notification has a special purpose, under which each of the relevant Entries falis. With respect to Entrv ? in Schedule I, a reading of the Entry alongside G.O.Ms.No 1615, dated 31.08.2005, shows that the government intended to exempt the applicability of VAT on products used by orthopedic surgeons as is reflected in the aforementioned G.O.Ms., dated 3l'08'2025, for the treatment of handicapped and disabled individuals' lt was through this notification G.O.Ms.No.l6t5, dated 31.08'2005 that the govemment clarified and limited the scope of exemption under Schedule I under Entry 2 to products reflected in the aforementioned G.O.Ms-, dated 3 1.08.2025.

17. Plain reading of Entry I 1 1 of Schedule IV would reveal thal the said Entry was in respect of Medical Equipments, devises and implants which are used for treatment other than the treatment rendered upon alt orthopedic patients and u.jtr:r.e the items \ rnentioned in Entry 2 in Schedule I is used for treatrn,:nt

18. It was also brought to the attention of this llcncl,r that the government, through a subseqlrent notification datcd I9.0j.2013, rcscindcd G.O.Ms.No.16l5, dated 31.08.2005. Follcr.ving this, the petitioncr began paying the applicable tax, which iurther supporls their clain.r t[.rat, until the nolification dated 19.03..](r1i rescincling G.O.Ms.No l6l5 came into effect, the products in question traded by the petitioners f'ell under the exempted categor.y under Section 7 of the Act. This also strengthens the petitioner,s ,:: se, indical_ing that until thcn, Iintry 2 ofSchedule I and Entry 1t 1 of Schedutc IV were concurrently in eff-ect and in force. It is not the case that the insertion of Entry 111 in Schedule IV (effective firl'rr 01 .07.2006) had, in an) way, amended, repealed, or nullitrr:cl E,ntrry 2 of Schedule I or G.O.Ms.No.1615. dated 31.08.2005.

19. For a[[ the aforesaid facts and circumstances of the case. we are inclined to allow the writ petition and hold thar the products traded by the petitioner which falls under HSN Cc,de No.9021.10 and 9021.3 l. which fall under Entry 2 ofSchedule I and not under lJntry 111 of Schedule IV and to the aforesairl extent. the r:ry i- 9 assessrlent order, dated 30.08.2008, is not sustainable and the same deserves to be and is accoldingly set aside rvilh consequence to tbllow.

20. Accoldingly, this writ petition is allon'cd. No ordet' as to Consequently, rniscellaneous applications pending il any' in this Writ Pctition, shalI stand closed. That Rule Nisi has made Absolute as above witness ' The Hon'ble SRI APARESH KUMAR SINGH, The Chief Justice on this Thursday, the Twenty Fifth Day of September, Two Thousand and Twenty Five. ,TRUE COPY// SD/.B. REKHA RANI ISTANT REG SECTION OFFICER The Commercial Tax Officer, Hyderguda Circle, The Commercial Tax Officer, Barkatpura Circle, Hyderabad. I I l One CC to SRI S.CHAKRAPANI, Advocate tOPUCI Two CCs to SPL. cP FOR STATE TAX, High Court for the State of Telangana at Hyderabad [OUT] Two CD Copies 1,r>\ To,

2. ?

4. 5 BSR LS HIGH COURT DATED: 251Os12025 ORDER WP.No.20716 of 2008 ALLOWING THE WRIT PETITION, WITHOUT COSTS Itt +( v^l 1)R 'r. E S I.q rc + 7,, t 0E N0v M -Sn41ggq-L1 o( :,// ,/