COMMISSIONER OF SALES TAX, U.P. versus DR. SUKH DEO

Citation: [1969] 1 S.C.R. 710 · Decided: 19-08-1968 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

Judgment (excerpt)

710 
COMMISSIONER OF SALES TAX, U.P. 
v. 
DR. SUKH DEO 
1fu1:u.11 I 9, 1968 
[J. C. SJ!AH .INO v. RA:vtASWAMl, JJ.] 
U.P. 
Sale.r Tax Act 
1948-Norification 
No. S.T. 3504/ X, 
dated 
1\1G}' 10, 1956 issued undr.r powrr given by s. 3A of the Act-Sin1:le 
point tax pa,vable on sale by ntanufacture of medicines and pharmaceuti-
cals-.\f edicines dispensed by 1nedical oractition. .. ~r to his patients--Such 
dispensing lvhe1lzcr 'n1a11ufacturc' ll'ithin meaning of 11otificatio11-Whl'ther 
A 
B 
taxable. 
C 
'[be respondent was a n1cdic;1J practitioner in Utrar Pradesh and main-
tained a dispensary front "'hich medicines were issued 
to 
his 
patients 
according to his prcscdptions. According to notific;ition No. s:r. ~504/X, 
dated May 10, 1956 issued under. s. 3A of the U.P. Sales Tax Act, 1948, 
tax in re;pect of sale of medicines and pharmaceuticals manufactured in 
the State \\·as pJyable at single point on the sale effected hy the manufac-
turer. The Sales Tax Officer held that dispensin~ of medicines wa'i 'manu-
D 
facture' \l."ithin the m<~aning of the aforesaid notification and ac;.se;sed the 
r"'Jl<>ndcnt to sales tax for the year 1956-57 on the turnover of medicines 
dispeased. 
The order was confirmed hy 
the 
appellate and 
re\.isional 
authorities, but the High Court decided in favour of the rcspondcnL The 
State appealed. 
1-iELD : \Vhcn 3.\ pre~cribed b}' a medical pracunoner, a mixture of 
different drugs is prepared by the medical practitioner or·by his employees 
· specially for the use of a patient in the treatment of an ailment or dis-
con1fort diagnosed by the medical practitioner by his professional skill, 
and \\'hich mixture is normally incap~1ble of being passed from hand to 
hand as a commercial cornn1odity, the medical practitioner supplying the 
medicines cannot be .said to be a manufacturer of the mixture and the 
mixture cannot be said to he manufactured 
\\'ithin the meaning of the 
notification. [712 G-H] 
In the absence of clearer phrascolo!,T)' the Court would not in a taxing 
provi.-.ion be "'illing to give an inteTprctation whereby a rriedical practi-
tioner supplying to hi_., paticntc; medicines and pharmaceutical prcpal'3tions 
separately is not liable to tax, hut \vhcn under bis direction they arc mixed 
hy hi<.; employees for the special use of a patient under his treatment and 
to achieve a specific purpose, the turnover from the resultant mixture is 
taxable. [713 DJ 
CIVIL APPELLATE Jt:IUSDICTIO'.'t: Civil Appeal No. 2458 of 
1966. 
Appeal by special leave from the judgment and decree dated 
April I, 1963 of the Allahabad High Coun in Sales-tax Reference 
No. 391 of 1959. 
C. B. Agarwala and 0. P. Rana, for the appellant. 
J. P. Goyal and Sobhag Mal Jain, for the respondent. 
• 
E 
F 
G 
H 
-
·-
••
SALE. TAX COMMR. V. SVKH DEO (Shah, J.) 
711 
A 
The Judgment of the Court was delivered by 
B 
c 
D 
E 
F 
G 
H 
Shah, J. 
The Judge (Revisions) Sales Tax, U.P., Lucknow, 
referred the following question to the High Court of Allahabad 
[or opinion : 
' 
"Whether the preparation of medicines on prescrip-
tions of the applicant amounted to a manufacture of 
"medicines and pharmaceutical preparations" within the 
meaning of notification No. S.T. 3504/X dated 10th 
May, 1956, and whether the applicant was assessable to 
tax on the turnover of the medicines so dispensed ?" 
The High Court held that the respondent was not a manufac-
turer of medicines and pharmaceutical preparations within the 
meaning of the notification. Against the answer recorded by the 
High Court, the Commissioner of Sales Tax, U.P., has appealed 
to this Court with special leave. 
The respondent is a medical practitioner and in the perfor-
mance of his professional duties he examines patients, advises 
them and prescribes medicines which are issued ~rom his dispen-
sary. 
The Sales Tax Officer being of the view that the! dispensing 
of medicines, according to the prescriptions issued by the respon-
dent, amounted to manufacture of medicines within the meaning 
of the notification No. S.T. 3504/X dated May 10, 1956, assess-
ed the respondent to pay tax on a turnover of Rs. 12,943 for 
the year 19 5 6-5 7. 
The order was confirmed in appeal by the 
Judge (Appeals) and was further confirmed by the Judge (Revi-
sions) Sales Tax. 
The sole question which falls to be determined in this appeal 
is whether by virtue of the notification, the respondent is exempt 
from liability to pay tax. 
Section 3 of the1 U.P. Sales Tax 

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