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_____________ Page No 3 of 114 http://www.judis.nic.in W.P.Nos.2982 TO 2987/2012 BATCH

5. The petitioners are corporate bodies and persons running hospitals and are providing expensive Medical/Health services to their inpatients. In the course of provision of such services, they have implanted implants such as Ortho Implants, Plates, Stents, Valves, Pace Makers, intra- aortic balloon pump etc, (collectively referred to as Prosthetics) in the body of the patients for treatment by surgery and provided such other ancillary services such as MRI Scan Films, X-Ray Films and others. This has been proposed to be taxed as “works contract” by the respondent within a meaning of Section 2(43) of the TNVAT Act, 2006 to propose tax from the petitioner.

55. He further submits that the impugned notice is against the purchases (inputs) of medicines which were utilized while treating the patients as the cost of the treatment was inclusive of the medicines and other items such as X-ray, MRI, CT Scan and Prosthetics which were collected from the patients.

56. Prosthetics such as pace maker stents, valves, artificial knee, shoulder parts, hips pins, rods etc which were implanted into the patients body resulted in a to “a sale” as there was transfer of property. The “medical implant” such as pacemakers, valves, pins, rods etc. and other implants cost of which are recovered from the patients amounts to sale.

61. It is submitted that the sale of these Medical implants/ prosthetics such as Ortho Plates, Surgical Plates, Screws, Knee replacement, Hip Replacements, Cardiac Implants, Stents, Valves, Pace Maker, Intra _____________ Page No 27 of 114 http://www.judis.nic.in W.P.Nos.2982 TO 2987/2012 BATCH Aortic Balloon Pump, Pulmonary Ortho Catheter, Prosthetic Valves, Tissue Valves and other implants have not been reported and corresponding sales for which consideration was received from the patients by way of final bill. It is submitted that discharge receipts were also not disclosed and were fully suppressed while filing their respective monthly returns. Since the scheme VAT enables to officer to accept the monthly returns, upon inspection, it was found that there is whole scale suppression and failure to report these supply of medical implants/prosthetics for which consideration was received from the patients which would amount to transfer of ownership for the purpose of assessment.