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2009 (1) TMI 793 - HC - VAT and Sales TaxWhether the learned single judge is justified in dismissing the W.P. No. 1537 of 2007 filed by the appellant-assessee (Bharti Airtel Ltd. v. State of Karnataka [2007 (3) TMI 684 - KARNATAKA HIGH COURT] declining to quash the order of reassessment passed by the third respondent-assessing authority and consequent 12 notices issued by him demanding from the appellant-assessee the tax quantified thereunder, on the ground that the appellant-assessee did not avail of the statutory remedy of appeal provided under the Karnataka Value Added Tax Act, 2003? Whether the third respondent-assessing authority was justified in passing the impugned order dated January 12, 2007 making reassessment of the tax payable by the appellant-assessee-company on the ground that the broadband connectivity provided by the appellant to its subscribers amounts to "sale of light energy" taxable under section 3 of the Karnataka Value Added Tax Act, 2003? Whether the Government of Karnataka has authority under the Constitution of India to levy tax on the appellant-company under the provisions of the KVAT Act in respect of its transaction of providing broadband connectivity to its subscribers, for the reason that "service tax" has been levied on it by the Union Government under the provisions of the "Finance Act, 1994" treating the said transaction as "service"? Held that:- As rightly submitted by the learned counsel for the appellant-assessee the question whether the transactions of the appellant-company with its subscribers could only be service for which it is liable to be taxed only under the provisions of the Finance Act, 1994 or it involved the element of sale of goods making it liable to be taxed under the provisions of the KVAT Act and whether the appellant-company could be taxed under both the said provisions, could not be decided by the appellate authority under the KVAT Act. Therefore, we are of the considered view, that the appellantassessee-company could maintain its said writ petition and as such the learned single judge is not justified in dismissing the same only on the ground that the appellant-assessee did not avail of alternative statutory remedy available to it under the said Act. Hence point No. 1 is answered in the "negative" and in favour of the appellant-assessee. We answer both the point Nos. 2 and 3 formulated by us in this appeal in the "affirmative" holding that the third respondentassessing authority is justified in passing the impugned order dated January 12, 2007 making the reassessment of the tax payable by the appellant-assessee-company on the ground that the activity of providing broadband connectivity by the appellant-company to its subscribers amounts to "sale of light energy" taxable under section 3 of the KVAT Act, 2003 and further holding that the Government of Karnataka is competent to levy tax on the said sale under the provisions of the KVAT Act, 2003 on the entire proceeds collected by it from its subscribers as "lease rentals" despite the appellant-company being assessed to service tax on the said activity by the Union Government under the provisions of the Finance Act, 1994, treating it as "service". Since the learned counsel for the appellant-assessee did not advance his arguments on the legality of the impugned order of the assessing authority insofar as it relates to the imposing of penalty and interest on the appellant-assessee, we have not considered the same.
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