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2023 (5) TMI 969 - HC - VAT and Sales TaxValidity of SCN demanding VAT - charges collected for supplying and installation of goods in respect of internet and cable services - respondent was registered during the periods in question - taxability of charges collected by the Respondent for supplying and installation of goods in respect of internet and cable services provide by the Respondent to its customers - HELD THAT:- The electromagnetic waves are not goods and waves are merely carriers of information and are not consumed by the customers in any form. Therefore, in the transaction between the cable service provider and the customer there is no sale of any tangible goods. Hence, the transaction is not taxable. The KAT has rightly held that the notices sent by AO has merely made a bald allegation that the assessee had supplied goods without referring to the particular goods or the sale transaction. Thus, the notice proposing the demand by itself was vague and contained no legal basis for proposing the demand. It has further held that the companies may receive installation charges from the customers for providing cable internet services. From such a contract it needs to be ascertained whether there is an implied transfer of cable to the customer or whether other service provider may also use the same cable for internet signal supply in which case, a deemed transfer of property can be ascertained. It is settled that strict interpretation of the words used in taxing statutes is warranted. No tax can be levied by implication, unless the subject falls within the four corners of statutory provision of the levy. There are no error in the findings recorded by the KAT - petition dismissed.
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