The order of the court was made by

F.M Ibrahim Kalifulla, J.:— The State has come forward with these tax case revisions as well as writ petitions, challenging the common order of the Sales Tax Appellate Tribunal, dated August 30, 1999 in Tribunal Appeal No. 143 of 1998, etc., batch.

2. In these tax case revisions as well as the writ petitions we are only concerned with the appeals relating to the assessment years 1991-92, 1992-93, 1994-95 and 1995-96.

3. The only issue involved in all these cases is as to whether “medical oxygen” would fall under entry 95 of Schedule I, Part I as was existing in the year 1991 or entry 20A of Schedule I, Part C as was existing in the year 1993 or Schedule I, entry 106 as was existing in the year 1991 or entry 25 of Schedule I as was existing in the year 1993. The relevant entries as was existing in the respective years were detailed as under:

“1991 (5-9-91) Schedule I (Part I) entry 95— rate six per cent

Drugs, patent or proprietary medicines as defined in section 3 of the Drugs and Cosmetics Act, 1940; or medicinal mixtures or compounds, the components of which have not already suffered tax, and including surgical dressing.

1993 (I (Part C) entry 20A) rate five per cent

Medicines conforming to the following description: Any medicinal formulation or preparation ready for use internally or externally for treatment or mitigation or prevention of diseases or disorders in human being or animals (excluding products capable of being used as creams, hair oils, tooth paste/tooth powders, cosmetics, toilet articles, soaps and shampoos), but including

(i) Allopathic medicines

(ii) Other medicines and drugs including ayurvedic, homeopathic, siddha and unani-preparations.

(iii) Medicinal mixtures or compounds, the components of which have not already suffered tax.

(iv) Surgical dressing which expression shall include adhesive plasters, adhesive plaster dressing, gyposona plaster of parries and bandages, velroc pop bandages elastro crape bandages, gauze, wadding gauze, liny and cotton wool pultices and similar articles impregnated or coated with pharmaceutical substances put up in forms or packings for surgical purposes which have seen sterlised and conform to the accepted standards of the medical profession.

(v) Pharmaceutical and surgical products of plastic and rubber including gloves, aprons and caps.

(vi) Instruments and appliances used in medical, surgical, dental or veterinary sciences, including scientigraphic apparatus, other electromedical apparatus and sight testing instruments including opthalmoscope, otoscope, laryngoscope, retinoscope, binocular loupe, parts and accessories thereof (other than those specified elsewhere in this Schedule).

1991 Schedule I, entry 106—rate 10 per cent

Gases (other than specified in item 159) in compressed), liquefied or solidified form.

(Item 159: Fuel gas including liquefied petroleum gas) 2993 Schedule 1 - Part E 25 rate 12 per cent

(1) Gases (other than those specified elsewhere in this Schedule) in all its forms.

(2) Purified and processed gases in all its forms.”

4. Before the Tribunal it was the second round since on the earlier occasion by order dated September 10, 1997 passed in O.P Nos. 3097 and 3098 of 1997, the Tamil Nadu Taxation Special Tribunal, while setting aside the earlier assessment order, directed the assessing authority to apply the principles laid down in the decision of the honourable Supreme Court in State of Goa v. Leukoplast (India) Ltd., [1997] 105 STC 318 before passing the order of assessment in order to find out whether the medical oxygen falls within entry 95 for the year 1991 or entry 20A for the year 1993 or entry 106 for the year 1991 and entry 25 for the year 1993, as specified in the above referred to entries. The rate of tax would be six per cent or five per cent fixed for the relevant years if the item “medical oxygen” is governed by those entries which falls under item 159 or entry 106. For the entry 106 and entry 25, the rate of tax would be 10 per cent and 12 per cent, respectively.

5. After the remand, the assessing authority rendered a finding that the product manufactured by the respondent/assessee, viz., contained 99.9 purity of medical content and the functions are curative when administered on the patient. The Tribunal has noted that the Additional Appellate Assistant Commissioner gave a clear finding that the product “medicinal oxygen” manufactured by the respondent satisfied all the three tests laid down by the honourable Supreme Court. Nevertheless the Appellate Assistant Commissioner held that it would fall within the expression “gas” including purified gas and made the assessment applying the rates specified in entries 106 and 25 of the years 1991 and 1993, respectively.

6. By the impugned order, the Tribunal took the view that since the analysis of the Appellate Assistant Commissioner, the tests laid down by the Supreme Court in the decision in State of Goa v. Leukoplast (India) Ltd., [1997] 105 STC 318, having been satisfied the “medicinal oxygen” could fall within entry 95, Schedule I, Part I for the year 1991-92 and under entry 20A of Schedule I, Part C for the subsequent years 1992-93 onwards and held that the rate of tax applicable would be six per cent for the assessment year 1991-92 and five per cent for subsequent assessment years. The Tribunal, however, held that the penalty imposed cannot be interfered with, inasmuch there was belated payment of tax it attracted section 12(3)(c) of the Tamil Nadu General Sales Tax Act.

7. Assailing the order of the Tribunal, learned Special Government Pleader would contend that the “medicinal oxygen” is nothing but “gas” and therefore, it would fall within the definition of “gas” as notified in entry 106 of Schedule I and entry 25 of the same Schedule in the years 1991 to 1993, respectively. The learned Special Government Pleader sought to distinguish the direct decision of the Kerala High Court in Southern Gas Ltd. v. State Of Kerala, [2005] 139 STC 504 finding that entry 106 is only the exclusion to the specific item 139 which refers fuel gas including liquefied petroleum gas, all other gas items including oxygen fall within the expression “gas”.

8. The learned counsel for the respondent would however, contend that the issue having been covered by the ratio of the decision in State of Goa v. Leukoplast (India) Ltd., [1997] 105 STC 318 (SC), and the Tribunal having applied the tests laid down in the said decision, there was no scope for taking a different view than what was held by the Tribunal. The learned counsel also placed reliance upon the decision of the Kerala High Court in Southern Gas Ltd. v. State Of Kerala, [2005] 139 STC 504. The learned counsel also pointed out that before the lower authorities, the respondent produced the licence issued to the respondent for manufacture of “medical oxygen” which licence was issued by the Director of Drugs Control Board, under the provisions of the Drugs and Cosmetics Act, 1940 and the Rules framed thereunder and therefore, it was no longer open to the petitioner to contend that the “medical oxygen” falls under the general category of “gas” and not a specific item of medical product.

9. Having heard learned counsel for the respective parties and having perused the material papers and the reasons contained in the relevant entries in the Schedule as well as the definition of “drug” under the Drugs and Cosmetics Act as well as the relevant Rules framed under the said Act, we are convinced that the conclusion of the Tribunal cannot be interfered with. The definition of “drug” under the Drugs and Cosmetics Act in the year 1991 and entry 95 of Schedule I, Part I, is concerned, it specifically states that in order to ascertain the drug one should be guided by the definition of “drug” as it is defined in the Drugs and Cosmetics Act, 1940. The definition in the said section reads as under:

“drug” includes,—

(i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings or animals, including preparations applied on human body for the purpose of repelling insects like mosquitoes;

(ii) such substances (other than food) intended to affect the structure or any function of the human body or intended to be used for the destruction of (vermin) or insects which cause disease in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette;

(iii) all substances intended for use as components of a drug including empty gelatin capsules and

(iv) such device intended for internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette, after consultation with the Board”

10. Subsequently, when entry 20A came to be inserted in Schedule I, Part C in the year 1993, the reading of the said entry shows that in effect, the definition of “drug” has been more or less bodily lifted into the said entry. It is also not in dispute that the “medical oxygen” has got 99.9 per cent purity of purified oxygen and that its use is only for treatment of patients and to mitigate contrary intensity of any disease or disorders in human being. It is common knowledge at times of emergency/the application of “medical oxygen” to a patient is resorted to in order to prevent any sudden collapse of a patient, which process is nothing but part of a treatment meted out to a patient to recoup the deterioration of health condition. Therefore, keeping the above basic features in mind, the tests laid down by the honourable Supreme Court in the decision in State of Goa v. Leukoplast (India) Ltd., [1997] 105 STC 318, have to be applied. The tests laid down are as under:

(i) What is the medicinal contents of the product has to be ascertained;

(ii) Further its curative function has to be found out to decide whether the product can be called a medicament at all.

(iii) Finally, it should be verified as to whether it is used to cure or alleviate or to prevent disease or to restore health or to preserve health hazard.

11. Having regard to the use of “medical oxygen” to a patient, as rightly concluded by the Additional Appellate Assistant Commissioner, the “medical oxygen” would positively satisfy the above three tests laid down by the honourable Supreme Court. Therefore, when once the said findings of the Appellate Assistant Commissioner, as regards the nature of product, viz., “medical oxygen” has been noted, it would be travesty of justice to still hold that would be falling under the category of “gas” and not under the category of entry 95, 20A of Schedule I in the years 1991 to 1993. Therefore, the ultimate conclusion of the Tribunal in the orders impugned in setting aside the order of the Appellate Assistant Commissioner, cannot be found fault with. We are not therefore, inclined to interfere with the said order. Moreover, the said issue is directly covered by the decision of Kerala High Court in Southern Gas Ltd. v. State Of Kerala, [2005] 139 STC 504 as the provisions are in pari materia. In the said circumstances, applying the said decision also we have no hesitation to hold that the “medical oxygen” would fall only under entry 95 as of the year 1991 and under entry 20A as of the year 1993 and will not fall under entry 106 as of the year 1991 and entry 25 as of the year 1993 as contended by the petitioner. We therefore, do not find merit in these tax case revisions as well as the writ petitions and the same fail and are dismissed. No costs.