TMI Blog2012 (9) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... l Government Advocate, The judgment of the court was delivered by B. MANOHAR J.- The appellant has filed this appeal, being aggrieved by the suo motu revisional order bearing No. ZAC-1/B.Div/SMR-20/2008-09 dated August 12, 2009 passed by Additional Commissioner of Commercial Taxes, Zone-I, Bangalore setting aside the order dated May 14, 2007 passed by the Joint Commissioner of Commercials Taxes (Appeals), Bangalore (hereinafter referred to as the appellate authority ). 2. The appellant is the public limited company and also registered under the provisions of the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as the KVAT Act ) engaged in the activity of rendering services of cellular mobile telephones to its subscr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry challans. Since the appellant is liable to pay the service tax, the same cannot be treated as goods and the Act is not applicable. The question of furnishing the documents as contemplated under section 53(2)(b) does not arise. However, check-post authority levied penalty of ₹ 1,53,984 as per levy order dated December 7, 2005. 3. Being aggrieved by the said levy of penalty, the appellant preferred an appeal before the Joint Commissioner for Commercial Taxes (Appeals), Bangalore. The appellate authority by its order dated May 14, 2007 allowed the appeal and held that the goods under movement being not taxable under the Sales Tax Act, the question of levying tax under the Karnataka Value Added Tax Act does not arise. Recharge cards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. The pricing-cum-delivery challans, accompanied with the goods vehicle was a proper document, which falls within the documents that are prescribed under section 53(2)(b) of the Act. The delivery challan contains date, code and prescription of the goods, quantity and cost of the goods and the amount of service tax particulars, etc. Hence there is no violation of provisions of the Act. He also relied upon the judgment reported in [2011] 43 VST 1 (SC); [2011] 10 GSTR 12 (SC); [2012] 72 KLJ 65 (SC) Idea Mobile Communication Ltd. v. Commissioner of Central Excise and Customs, Cochin) in paras 17, 18 and 19 contending that the amount received by the cellular telephone company from its subscribers towards the SIM cards will form part of the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same issue and sought for dismissal of the appeal. 6. We have carefully considered the arguments addressed by the learned counsel for the parties and perused the orders impugned in the above appeal. 7. This appeal was admitted to consider the following substantial questions of the law: (i) Whether, on the facts and in the circumstances of the appellant's case, can it be held that the order dated May 14, 2007 passed by the first appellate authority in VAT. Ap. No. 57/05-06 under section 62(6) of the Act, was erroneous and prejudicial to the interests of the Revenue for the revisional authority to have invoked the extraordinary revisional powers conferred under section 64(1) of the Act? (ii) Whether, on the facts and in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cards are liable to tax is fully considered by the honourable Supreme Court in a judgment reported in [2011] 43 VST 1 (SC); [2011] 10 GSTR 12 (SC); [2012] 72 KLJ 65 (SC) (Idea Mobile Communication Ltd. v. Commissioner of Central Excise and Customs, Cochin). Paragraphs 17, 18 and 19 of the said judgment read as under (pages 8 and 9 in 43 VST): 17. The High Court has given cogent reasons for coming to the conclusion that service tax is payable inasmuch as SIM card has no intrinsic sale value and it is supplied to the customers for providing mobile service to them. It should also be noted at this stage that after the remand of the matter by the Supreme Court to the sales tax authorities the assessing authority under the Sales Tax Act dro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the appellant itself subsequently has been paying service tax for the entire collection as processing charges for activating cellular phone and paying the service tax on the activation. The appellant also accepts the position that activation is a taxable service. The position in law is therefore clear that the amount received by the cellular telephone company from its subscribers towards the SIM card will form part of the taxable value for levy of service tax, for the SIM cards are never sold as goods independent from services provided. They are considered part and parcel of the services provided and the dominant position of the transaction is to provide services and not to sell the material, i.e., SIM cards which on its own but without t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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