Reserved On : 21/03/2025 Pronounced On : 25/07/2025 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 16927 of 2011 With R/SPECIAL CIVIL APPLICATION NO. 865 of 2021 With R/SPECIAL CIVIL APPLICATION NO. 13722 of 2021 With R/SPECIAL CIVIL APPLICATION NO. 13723 of 2021 With R/SPECIAL CIVIL APPLICATION NO. 13712 of 2021 With R/SPECIAL CIVIL APPLICATION NO. 7823 of 2019 With R/SPECIAL CIVIL APPLICATION NO. 14638 of 2021 With R/SPECIAL CIVIL APPLICATION NO. 3123 of 2015 With R/SPECIAL CIVIL APPLICATION NO. 5344 of 2015 With R/SPECIAL CIVIL APPLICATION NO. 5345 of 2015 With R/SPECIAL CIVIL APPLICATION NO. 5421 of 2015 With R/SPECIAL CIVIL APPLICATION NO. 8443 of 2015 FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE BHARGAV D. KARIA and HONOURABLE MR.JUSTICE D.N.RAY ==========================================================

Approved for Reporting Yes No ✓

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BANKERS CARDIOGY PVT LTD & ANR.

Versus COMMISSIONER OF COMMERCIAL TAX & ANR.

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Appearance:

MR SN SOPARKAR SENIOR ADVOCATE WITH MR UCHIT SHETH WITH MR MANISH K KAJI(1030) for the Petitioner(s) No. 1,2 MR KAMAL TRIVEDI, ADVOCATE GENERAL WITH MR VINAY BAIRAGA for the Respondent(s) No. 1,2 ==========================================================

CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA and HONOURABLE MR.JUSTICE D.N.RAY

CAV JUDGMENT

(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)

1. Heard learned Senior Advocate Mr.S.N.Soparkar with learned advocate Mr.Uchit N. Sheth and learned advocate Mr.Manish K. Kaji for the petitioners and learned Advocate General Mr.Kamal Trivedi with learned Assistant Government Pleader Mr.Vinay Bairagra for the respondents.

2. Since common issue is involved in all these petitions, with the consent of the learned advocates for the respective parties, they have been heard analogously and are disposed of by this common judgment.

3. By this group of petitions, the petitioners have challenged the vires of provision of clause (g) of section 2(23) of the Gujarat Value Added Tax Act, 2003 (For short “the VAT Act”) as being ultra vires the legislative competence of the State Legislature and further have prayed to quash and set aside the assessment orders and/or show cause notices for the relevant period declaring that supply of medicines, stents, implants, consumables etc. during the course of treatment of patients does not amount to ‘sale’ as defined in section 2(23) of the VAT Act.

A) FACTS:

4. The petitioners are hospitals engaged in the activity of treatment of as indoor patients. In order to treat the patients, the petitioner hospitals use medicines, implants, stents, consumables, etc.

5. In these petitions, by impugned show cause notices/orders, the respondents have imposed value added tax under the VAT Act on supply of such medicines, implants, stents, consumables, etc. used for treatment of indoor patients considering them as “sale of goods”.

6. According to the petitioners, use of medicines, implants, stents, consumables, etc. is neither ‘sale’ as understood under the Sales of Goods Act, 1930 nor ‘deemed sales’ as defined under Article 366(29A) of the Constitution of India and therefore, the respondent State does not have competence to impose tax on such supply of goods under the VAT Act, as such imposition of tax would be beyond the legislative competence under Entry 54 of List II of the Seventh Schedule of the Constitution of India.

7. Section 2(23) of the VAT Act defines “sales” as under:

“2(23) "sale" means a sale of goods made within the State for cash or deferred payment or other valuable consideration and includes,-

(a) transfer, otherwise than in pursuance of a contract, of property in goods for cash, deferred payment or other valuable consideration, (b) transfer of property in goods (whether as goods or in some other form) involved in execution of a works contract, (c) delivery of goods on hire purchase or any system of paym