ORDER
R.V. Raveendran, J.
1. The petitioner is an assessee under the Karnataka Sales Tax Act, 1957 (for short, “the Act”). For the assessment period 1999-2000, the petitioner declared the gross and taxable turnover at Rs. 3,38,49,121 and Rs. 1,84,03,986 respectively. The taxable turnover included first sale of nitrous oxide to hospitals and nursing homes for anaesthetic purposes to an extent of Rs. 14,48,084.25. The petitioner had classified the sale of nitrous oxide as a “chemical” falling under entry No. 10-A in Part C of the Second Schedule, which related to “chemicals of all kinds including copper sulphate, caustic soda, dyes and sulphur”. The rate of tax for substances falling under entry 10-A was four per cent from April 1, 1996 to December 31, 1999 and eight per cent from January 1, 2000 to March 31, 2000.
2. The assessing authority by order dated July 30, 2001, rejected the classification of nitrous oxide as a “chemical” falling under entry No. 10-A in Part C of the Second Schedule. He treated it as an unclassified goods falling under Section 5(1) of the Act, for which the rate of tax was 10 per cent.
3. In an appeal filed by the petitioner, the appellate authority held that the nitrous oxide was an “industrial gas “falling under entry 3 in Part I of the Second Schedule. The said entry related to “industrial gas such as oxygen, acetylene, nitrogen and the like”, for which the tax was 10 per cent from April 1, 1998 to December 31, 1999 and 12 per cent from January 1, 2000 to March 31, 2000.
4. In a second appeal filed by the petitioner, the Karnataka Appellate Tribunal held that nitrous oxide fell under entry No. 21 in Part S of the Second Schedule. The said entry related to “surgical and dental instruments, tools and aids” for which the rate of tax was ten per cent during the relevant year.
5. Feeling aggrieved, the petitioner has filed this revision petition under Section 23(1) of the Act. The petitioner relies on the Test Certificate dated September 12, 2000 issued by the Bangalore Test House which reads thus :
“Nitrous oxide is also called by the chemical name di-nitrogen mono oxide or hyponitrous acid anhydride with molecular formula of NO and molecular weight of 44.02. It contains 63.65% of Nitrogen (N) and 36.35% of Oxygen (O). It is prepared by thermal decomposition of ammonium nitrate.
Nitrous oxide is colourless gas, slightly sweetish odour and taste m.p–90.81 ; b.p–88.46 freely soluble in sulphuric acid, soluble in alcohol, ether, oils.
Use : Anaesthetic by inhalation and analgesic. Ref: Merck Index. Page No. 1051.
Remarks : From the above facts, it is concluded that nitrous oxide is a chemical.”
The petition raises the question whether nitrous oxide is to be treated as a “chemical” falling under entry No. 10-A in Part C of the Second Schedule or as a “surgical aids” falling under entry No. 21 in Part S of the Second Schedule.
6. “Chemical” in a broad sense refers to all substances produced by any chemical process. The principal use of nitrous oxide (laughing gas) is as an anaesthetic in surgical operation procedures of short duration. The fact that nitrous oxide is produced by a chemical process and therefore would fall under the general definition of “chemical” is not disputed by the State. What is contended by the State is that the “nitrous oxide” falls under specific separate entry enacted by the State dealing with surgical aids (entry No. 21 in Part S of the Second Schedule) and therefore, it gets excluded from the general entry relating to chemicals (entry No. 10-A in Part C of the Second Schedule). It is also submitted that the items enumerated as being inclusive in the definition of “chemicals” is indicative of the fact that only solid substances and not gases are intended to be included under the said entry.
7. In Deputy Commissioner of Sales Tax (Law) v. G.S. Pai & Co. , the Supreme Court observed:
“Now there is one cardinal rule of interpretation which has always to be borne in mind while interpreting entries in sales tax legislation and it is that the words used in the entries must be construed not in any technical sense nor from the scientific point of view but as understood in common parlance. We must give the words
used by the Legislature their popular sense meaning ‘that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it’.”
7.1. In United Offset Process Pvt. Ltd. v. Assistant Collector of Customs the Supreme Court held:
“In incorporating items in the statutes like excise, customs or sales tax whose primary object is to raise revenue and for which to classify diverse products, articles and substance, resort should be had not to the scientific and technical meaning of substance but to their popular meaning, viz., the meaning attached to these expressions by those dealing in them.” (emphasis supplied).
7.2. We may also refer to a decision of the division Bench of this Court in Indian Oxygen Ltd. v. State of Karnataka reported in [1990] 79 STC 351, which considered the question whether “medicinal oxygen” and “nitrous oxide” used as anaesthetics in hospitals could be treated as “industrial gas” falling under (old) entry No. 121 of the Second Schedule or should be taxed under Section 5(1) as a product not specifically provided for. The division Bench held that “oxygen” in the entry “industrial gas such as oxygen, acetylene, nitrogen and the like” can only refer to oxygen which is accepted in trade as an industrial gas. It held that “medical oxygen” is different from “industrial oxygen” and that if a product is not an “industrial gas” as understood in common parlance by those who deal in the product, even if medical oxygen (which is a purified form of industrial oxygen) can be used as “industrial oxygen”, it cannot be treated as an “industrial gas”.
7.3. When the decision in Indian Oxygen Ltd. v. State of Karnataka was rendered, there was no entry in existence similar to entry No. 21 in Part S of the Second Schedule. Entry No. 21 in Part S of the Second Schedule, introduced with effect from April 1, 1988 earlier read “Surgical/dental instruments and tools and syringes and its needles”. The entry was substituted thus with effect from April 1, 1993.
“Surgical and dental instruments, tools and aids including electrical and electronic equipments and appliances ; syringes and needles ; operation theatre equipments, shadow bulbs and tubes, specially made operation and examination tables and cots and suction apparatus ; stands, stretchers, trolleys, dental chairs, laboratory equipments and glassware ; stethoscopes thermometers, lactometers, B.P. instruments, surgical cotton wool ; enema cans, bed pans, kidney
trays and such other hospitalware ; surgical gloves, aprons operation suits, rubber sheets, catheters ; I.V. sets and the like ; cervical collars, abdominal belts telonet paraffin gauze dressing, ultrasound jelly, pinchers (steel), medicinal oxygen, medical kits, medical disposable intravenous administration set, thermometer, mechanical nazal filters, instrument steriliser, injection needles, hospitalwares, gypeona plaster of paris bandage, fixed partial dentures, enamelled iron trays, and basins (used in the hospital), ECG recording chart, ECG jelly, drip set, disposable hypodermic needles, cotton buds, bed elevators absorbent cotton rolls and the like.” (emphasis supplied).
Entry 21 (Part S) as it presently stands encompasses every substance or product considered as a surgical/dental instrument or tool, or surgical/dental aid. The legislative intent is to rope in all items relating to or associated with or useful in surgery and dentistry under entry 21 in Part S. The term “surgical” contextually refers to the branch of medicine dealing with the practice of treating injuries or diseases by any manual, mechanical or operative procedures or measures (as contrasted from treatment by mere prescription or administration of drugs). Neither a “surgical aid” falling under entry 21 (Part S) nor a “medicinal or pharmaceutical preparations” falling under entry 5 (Part M) can be treated as a “chemical” falling under entry 10-A (Part C), though they may be “chemical” in composition.
8. The petitioner admitted before the assessing authority and before us, the nitrous oxide is sold mainly to hospitals and nursing homes, for being used as an anaesthetic. This makes it clear that nitrous oxide is treated as a surgical aid in trade circles and common parlance. The items illustratively enumerated in entry No. 21 (Part S) of the Second Schedule under “surgical and dental instruments, tools and aids” include “medicinal oxygen” and the like. Medicinal oxygen is used to enrich gaseous anaesthetics, during general anaesthesia. “Nitrous oxide” is used as an anaesthetic. Though both “nitrous oxide” and “medical oxygen” may answer the general and wider definition of “chemicals” they are clearly identifiable and used as surgical aids. “Nitrous oxide” would therefore definitely fall under “surgical and dental aids including….medicinal oxygen…and the like”. It is well-settled that where a product or substance falls under a specific entry in the Schedule, the product will have to be considered under the specific entry even though it may also fall under an entry
containing general description. Where a substance or product falls under a specific entry and also under a general entry, the specific entry will exclude the general entry. Therefore, the Tribunal was right in classifying nitrous oxide as falling under entry No. 21 in Part S of the Second Schedule and rejecting the request of the petitioner to treat it as a “chemical” falling under entry No. 10-A in Part C of the Second Schedule.
The petition has no merits. It is accordingly rejected.