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February 2015

M/S.Sanjos Paritosh Hospital V. Commercial Tax Officer, Thrissur and Others, (2012) 55 VST 208 (Ker)

By C. B. Thakar Advocate; G. G. Goya, Janak Vaghani Chartered Accountants
Reading Time 1 mins
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VAT- Dealer- Business- Private Hospitals Selling Medicines and Consumables to Patientsare Dealers and Liable to Pay VAT, S. 2(ix), (xv), (xx), (xliii) and (lii) of The Kerala Value Added Tax Act, 2003

Facts
The Kerala Private Hospital’s Associations, State Committee filed writ petition before the Kerala High Court disputing their liability under the Kerala Value Added tax Act (KVAT ).

Held
A comparative analysis of the provisions contained in the KGST Act which were considered by the court in case of P.R.S. Hospital [2004] 135 STC (ker) and the corresponding provisions of the KVAT Act show that statutory provisions remain the same although the KGST Act is replaced by the KVAT Act. Therefore following earlier judgment of division bench of Kerala High Court in P.R.S. Hospital the court held that the hospitals are carrying on a business and are dealers liable to pay vat on sale of medicines and consumable to patients. The court also upheld the constitutional validity of charging section 6 of the act. Accordingly the writ petition was dismissed.

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