IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR WEDNESDAY, THE 17TH DECEMBER 2008 / 26TH AGRAHAYANA 1930 OP.No. 31064 of 2000(W) --------------------------------------- PETITIONER(S): ------------------------- 1. HOLY FAMILY HOSPITAL, MUTHALAKKODAM, THODUPUZHA, IDUKKI DISTRICT, REPRESENTED BY ITS ADMINISTRATOR. 2. BISHOP VAYALIL MEDICAL CENTRE, MOOLAMATTOM P.O., IDUKKI DISTRICT, REPRESENTED BY ITS ADMINISTRATOR. 3. MORNING STAR MEDICAL CENTRE, ADIMALI P.O., IDUKKI DISTRICT, REPRESENTED BY ITS DIRECTOR. BY ADV. SRI.V.M.KURIAN SRI.A.V.THOMAS SRI.MATHEW B. KURIAN SRI.K.T.THOMAS RESPONDENT(S): --------------------------- THE INTELLIGENCE OFFICER (IB), DEPARTMENT OF COMMERCIAL TAXES, IDUKKI, KATTAPPANA P.O. GOVERNMENT PLEADER SRI.GEORGE VADAKKEL THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 17/12/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss O.P.NO.31064/2000 W APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE INTERIM ORDER DTD. 24/03/1998 PASSED IN CMP.NO.19356/97 IN O.P.NO.10923/1997. EXT.P2: COPY OF THE EXPLANATION DTD. 27/04/2000 FILED BY 1ST PETITIONER BEFORE THE RESPONDENT. EXT.P3: COPY OF THE OBJECTION DTD. 28/07/2000 FILED BY 1ST PETITIONER BEFORE THE RESPONDENT. EXT.P4: COPY OF THE NOTICE UNDER SECTION 45A OF THE KGST ACT DTD. 05/09/2000 ISSUED BY RESPONDENT TO 1ST PETITIONER. EXT.P5: COPY OF THE ORDER NO.135/1/2000 DTD. 30/09/2000 ISSUED BY THE RESPONDENT TO THE 1ST PETITIONER LEVYING PENALTY ON THE 1ST PETITIONER. EXT.P6: COPY OF THE NOTICE DTD. 14/07/2000 SENT BY THE RESPONDENT TO THE 2ND PETITIONER. EXT.P7: COPY OF THE REPLY DTD. 26/07/2000 SUBMITTED BY THE 2ND PETITIONER TO THE RESPONDENT. EXT.P8: COPY OF THE NOTICE DTD. 05/09/2000 ISSUED BY THE RESPONDENT TO THE 2ND PETITIONER UNDER SECTION 45(A). EXT.P9: COPY OF THE ORDER DTD. 30/09/2000 ISSUED BY THE RESPONDENT IMPOSING PENALTY ON THE 2ND PETITIONER UNDER SECTION 45A. EXT.P10: COPY OF NOTICE DTD. 14/07/2000 ISSUED BY THE RESPONDENT TO THE 3RD PETITIONER. EXT.P11: COPY OF THE REPLY DT. 27/07/2000 SUBMITTED BY THE 3RD PETITIONER BEFORE THE RESPONDENT. EXT.P12: COPY OF THE REPRESENTATION DTD. 28/10/2000 SUBMITTED BY THE 3RD PETITIONER TO THE RESPONDENT. EXT.P13: COPY OF THE CERTIFICATE OF REGISTRATION NO.ER 64/77 DTD. 16/03/1977 ISSUED BY THE SOCIETY REGISTRAR TO THE 1ST PETITIONER. Kss ...2/- ...2..... O.P.NO.31064/2000 W EXT.P14: COPY OF THE CERTIFICATE NO.E1.60634/89 DTD. 02/01/1990 ISSUED BY THE DEPUTY COLLECTOR (GENERAL), IDUKKI TO THE 1ST PETITIONER. EXT.P15: COPY OF THE CERTIFICATE C.NO.10(22A)/TECH.20/90-91 DTD. 30/06/1992 ISSUED TO THE 1ST PETITIONER BY THE ASST.COMMISSIONER OF INCOME TAX, COCHIN. EXT.P16: COPY OF THE TRUST DEED NO.499 OF 1983 DTD.10/10/1983. EXT.P17: COPY OF THE CERTIFICATE NO.10(22A) TECH/17/90-91 ISSUED TO THE 2ND PETITIONER BY THE ASST.COMMISSIONER OF INCOME TAX DTD. 30/06/1992. EXT.P18: COPY OF THE CERTIFICATE OF REGISTRATION NO.E.R.167/85 DTD. 17/04/1985 ISSUED BY THE SOCIETY REGISTRAR TO THE 2ND PETITIONER. EXT.P19: COPY OF THE CERTIFICATE DTD. 12/01/93 ISSUED TO THE 3RD PETITIONER BY ASST.COMMISSIONER OF INCOME TAX, COCHIN. RESPONDENT'S EXHIBITS: N I L /TRUE COPY/ P.A.TO JUDGE Kss T.R. Ramachandran Nair, J. ~~~~~~~~~~~~~~~~~~~~~~~~~~~ O.P. No.31064/2000-W ~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dated this the 17th day of December, 2008. J U D G M E N T The challenge made by the petitioners in this writ petition is against Exts.P5 and P9 orders in respect of petitioners 1 and 2 and Ext.P10 in respect of the third petitioner. These three petitioners are hospitals, established and managed by charitable trusts under religious congregations. According to the petitioners, they cannot be termed as dealers under the Kerala General Sales Tax Act as there is no sale of medicine in the hospital concernd. The objections raised by the petitioners mainly are that the hospitals are run on a charitable basis without any profit motive. Even though, they are purchasing medicines from dealers they are not sold to the people outside who are not their patients and the medicines are used by the doctors only for the treatment of their patients. 2. The learned Government Pleader submitted that the issue is covered against the petitioners as per the decision of this Court in P.R.S Hospital v. State of Kerala [2003 (1) KLT 133]. Therein it was held that the hospital can be treated as a dealer to subject it to all the disciplines provided under the Act and Rules. O.P. No.31064/2000 -:2:- 3. The learned counsel for the petitioner submitted that the question whether the charitable hospitals like the petitioners come within the definition of dealer, has not been examined therein and the factual and legal situation, as far as the petitioners are concerned, are different from the cases considered therein. Therefore, the learned counsel seeks for an opportunity to sustain the objection raised in Ext.P2 and the like objections filed by the other petitioners. Alternatively, it is contended by the petitioners that they are prepared to take out registration as required under the provisions of the Act, as directed by this Court in the above quoted judgment in paragraph (11). Pending consideration of their objections by the respondent herein, the petitioners are free to adopt such a procedure. To enable the respondent to consider the objections as regards the charitable nature of the institutions, proceedings Exts.P5, P9 and P10 will stand set aside. The respondent will consider the matter afresh. Final orders shall be passed within a period of two months from the date of receipt of the copy of this judgment. Only after final orders are passed, further action, if any, will be taken. In view of the fact that the proceedings were stayed by this Court, even if they are liable to be registered as dealers and since they have not collected tax, according to petitioners as far as the past years are concerned, it is upto the respondent to pass appropriate orders keeping in mind the findings in O.P. No.31064/2000 -:3:- paragraph (11) of the judgment cited above. In that event, the petitioners will have to prove that they have not collected any tax. The writ petition is disposed of as above. No costs. (T.R. Ramachandran Nair, Judge.) ms O.P. No.31064/2000 -:4:- ORDER ON C.M.P.NO.52760/2000 IN O.P No.31064/2000 DISMISSED. SD/-T.R.RAMACHANDRAN NAIR, JUDGE 17/12/2008 \\TRUE COPY// P.A TO JUDGE O.P. No.31064/2000 -:5:- T.R. Ramachandran Nair, J. ~~~~~~~~~~~~~~~~~~~~~~~~~~~ O.P. No.31064/2000-W ~~~~~~~~~~~~~~~~~~~~~~~~~~~ J U D G M E N T 1 7 t h D e c e m b e r , 2 0 0 8 .