This batch of writ petitions arefiled by the private hospitals in the State and the Kerala Private Hospitals' Association (Modern Medicine) State Committee. They have approached this Court disputing their liability to get themselves registered as dealers under the Kerala Value Added Tax Act (hereinafter referred to as the Act for short) and to pay tax under the said Act for the medicines and consumables sold to their patients.

2. The issue being common, the cases were heard together treating WP(C) No. 7129/08 as the leading case.

3. In these writ petitions, there are two main prayers. The first prayer is to declare that hospitals are not liable to take registration and pay tax under the Act for the supply of medicines and other items meant for treatment. The second prayer, which was urged as an alternative one, is to declare that Section 6 of the Act and the corresponding rules are ultra vires and unconstitutional to the extent it seek to impose tax on hospitals and compel them to take registration under the Act. As a consequence, petitioners are also seeking to quash the notices, and other proceedings issued by the officers of the Commercial Taxes Department.

4. In so far as the liability to take registration under the Act and to pay tax thereunder is concerned, the contention of the counsel for the petitioners was that hospitals are rendering what is called "hospital service" and that supply of medicines and other items is incidental to the service rendered to the patients treated. According to them, the Act does not contemplate levy of tax on such supply of medicines and other items and hence the hospitals have no obligation to get themselves registered under the Act or to pay tax thereunder.

5. In my view, this question does not need much deliberation for the reason that this very issue has already been considered by this Court and has been decided against the petitioners. In the context of the provisions contained in the Kerala General Sales tax Act, in P.R.S. Hospital v. State of Kerala (2003(1) KLT 633), this Court considered the question whether hospital is a dealer within the definition of the term as contained in the KGST Act. In that context, the question regarding the liability of the hospitals to take registration and to pay tax on the turn over of sale and supply of other items in the hospitals was considered. Thereafter, referring to the definition of the expressions business, dealer, goods, sale and turn over in the KGST Act, this Court answered the question thus:- The main contention of the petitioners as stated above is that supply of medicine though conceded, is only incidental and essentially the hospital is rendering medical services with professionals namely doctors and nurses who are experienced in the medical field. The petitioners have relied on the decisions of the Supreme Court in State of Tamil Nadu v. Board of Trustees of the Port of Madras ((1999) 114 STC 520) and in Northern India Caterers (India) Ltd. LT. Governor of Delhi ((1978) 42 STC 386). Relying on the above two decisions the petitioners contended that the main activity being rendering of medical services, the supply of medicine is only incidental and it does not constitute "sale" to make the petitioners liable as a "dealer" under the Act. In this regard the petitioners have pointed out that the pattern of billing in the hospitals may vary from hospital to hospital. In some hospitals consolidated bills are raised including service charges, accommodation charges, charges for supply of medicine, good etc., whereas in some other hospitals separate bills are raised for medical services, supply of medicine, food, rent and other allied services like X-ray ECG etc. It may not be possible to bifurcate the amount charged to a patient for the various services rendered in hospital. However, there is no dispute that supply of medicine is an integral part of the services rendered and it is significant in terms of cost to the patient and cha