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2021 (9) TMI 421 - ANDHRA PRADESH HIGH COURTClassification of goods - rate of tax - sales of certain equipment treated as hospital equipment or hospital furniture instead of treating them as medical equipment - taxable at @ 14.5% or 5% under Entry 111 of IV schedule to the A.P. Value Added Tax, 2005? - HELD THAT:- The tax or fiscal statutes shall be interpreted with reference to strict letter of law but not merely to the spirit or the substance of the law. In case when two constructions are possible, that one favourable to the tax payer has to be adopted. With this principle, it has now to be seen whether the different varieties of hospital equipments sold by the petitioner fall within the groove of medical equipment/device/implants as mentioned in Entry 111 of Schedule IV or fall under the term ‘furniture’ so as to be charged under the residuary entry of Schedule V of the AP VAT Act, 2005. The term ‘medical equipment/device/implants’ is not defined under the Act. The simple words ‘equipment/device/implant’ may refer to any type and any purpose if they are not qualified by the important prefix ‘medical’. Therefore, it is important and germane at this juncture to derive the meaning of the word ‘medical’ which governs the rest of the words. Testing on the anvil of medical purpose, there can be no demur to emphasise that hospital beds are customized or tailor-made to suit the diagnostic tests, treatment process and also for post-operative care and comfort of a patient. Though for argument sake one may say that a hospital bed can also be used as furniture at home, still it is a misfit to be called as furniture, for, home furniture is meant for elegant and decorative purposes. The same is the case with OT lights. These OT lights are also customized to provide LED (Light Emitting Diode) technology, Shadow less illumination, free rotation etc. to be used in diagnostic and treatment process. By no stretch of imagination the OT lights can be said to be part of home furniture - in substance, while hospital beds and OT lights satisfy the term ‘medical equipment’, bedside cabinets and lockers do not. Thus, it is concluded that those equipments, devices and implants which partake in the process of diagnosis, treatment, cure and care of the patients either directly or indirectly, will alone come under Entry 111 of Schedule IV of the AP VAT Act, 2005. Whether a particular equipment, device or implant fulfils the aforesaid test is a question of fact to be determined on case-to-case basis. The batch of writ petitions are partly allowed by setting aside the impugned assessment orders with a direction to the concerned Assessing Authorities to pass the fresh assessment orders by including the hospital beds and OT lights in Entry No.111 of Schedule IV and bedsides lockers/cabinets in residuary entry of Schedule V of the AP VAT Act, 2005.
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