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2020 ] STATE OF ANDHRA PRADESH v. LINDE INDIA LTD. 13
1957 which stipulated a tax rate for industrial gases. The High Court answered
this in the negative and drew a distinction between industrial oxygen and medi-
cal oxygen in the following terms :
“The object of Entry 121 is clearly to attract an “industrial gas”, which can-
not, on the face of it include, a gas which is not considered as an “industrial
gas” by those who deal in it. It is clear that a person requiring “medical ox-
ygen” will not be satisfied if he is supplied with the “industrial oxygen”
and similarly an honest trader would not sell “medical oxygen” as “indus-
trial oxygen”.
26. In State of Tamil Nadu v. Ram Oxygen (Pvt.) Ltd. [(2010) 35 VST 478],
the High Court of Madras held that medical oxygen is a ‘drug’ within the ambit
of the 1940 Act :
“...It is also not in dispute that medical oxygen has 99.9% purity of purified
oxygen and that its use is only for treatment of patients and to mitigate con-
trary intensity of any disease or disorders in human beings. It is common
knowledge at times of emergency, the application of ‘medical oxygen’ is re-
sorted to in order to prevent any sudden collapse of a patient, which pro-
cess is nothing but part of a treatment meted out to a patient to recoup the
deterioration of health conditions...”
The Madras High Court noted that at times of emergency, the administration of
medical oxygen is resorted to prevent the sudden collapse of patients, which
forms a part of the treatment meted out to them.
27. In Panki Oxygen v. State of Uttar Pradesh [2014 SCC Online All 2144],
the question before the High Court of Allahabad was whether tax on Oxygen IP
under the Uttar Pradesh Trade Tax Act was to be levied under the Entry “Medi-
cine and Pharmaceutical Preparation” or under the Entry “Oxygen and other
gases”. Justice Ashok Bhushan (sitting as a judge of that High Court) relied on
the above decisions of various High Courts and held thus :
“In view of the above, we are of the view that oxygen (IP) is fully covered
by Entry 26 of the notification dated 15-1-2000 i.e. “medicines and pharma-
ceutical preparation” and shall not be covered by Entry 47 of the notifica-
tion dated 29-1-2001 which relates to “oxygen and other gases”. The oxygen
(IP) i.e. medicinal oxygen being a drug fully covered by Entry 26 of the no-
tification dated 15-1-2000 cannot be included in the general entry i.e. Entry
47 of the notification dated 29-1-2001.”
28. In Inox Air, the question before the High Court of Andhra Pradesh
was whether Liquid Medical Oxygen IP, Medical Grade Oxygen and Nitrous
Oxide IP are liable to be taxed under Entry 88 of the 2005 Act. The High Court
held :
“As medical oxygen LP and nitrous oxide LP are used in the treatment and
mitigation of disorders in human beings, and as they are generally under-
stood in the trade to be surgical aids, both these substances would fall un-
der the definition of drug under Section 3(b)(1) of the Drugs Act, and con-
sequently, fall under Entry 88 of Schedule-IV of the Act. Viewed from any
angle, both medical oxygen IP and Nitrous Oxide IP fall under Entry 88 of
Schedule-IV and are liable to tax only at 4%/5% and not at 12.5% or 14.5%.”
The High Court held that medical oxygen is used in the treatment and mitigation
of disorders in human beings, and are generally understood in trade to be surgi-
cal aids.
29. The above judgments highlight the curative and instrumental use of
Medical Oxygen IP and Nitrous Oxide IP in the mitigation and prevention of
GST LAW TIMES  7th May 2020  55