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2016 (9) TMI 1115 - MADRAS HIGH COURT

2016 (9) TMI 1115 - MADRAS HIGH COURT - TMI - Validity of order of assessment - Tamil Nadu Value Added Tax Act, 2006 - taxability of sale of recharge vouchers for mobile Sim Cards - similar issue has been decided in the case of BSNL v. Union of India and Others [2006 (3) TMI 1 - Supreme court] where it was held that there was no element of sale involved in the sale of Sim Cards or recharge vouchers. If the petitioner had filed appropriate returns, then there would not have been any problem in th .....

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s been committed by the dealer, can he be given an opportunity to rectify the mistake? - Held that: - Section 84 of the TNVAT Act, provides for such a remedy and the Assessing Officer is empowered to rectify the mistake - if on account of the mathematical error committed by the dealer resulted in a wrong assessment imposing higher rate of tax, such mathematical error can be corrected. This is what was requested by the petitioner stating that he has wrongly given the commodity code. The petitione .....

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the Respondent : Mr. S.Kanmani Annamalai, A.G.P. ORDER Heard Mr.V.Sundareswaran, learned counsel appearing for the petitioner and Mr.S.Kanmani Annamalai, learned Additional Government Pleader appearing for the respondent. By consent of the learned counsel for both sides, the writ petition is taken up for final disposal. 2. The petitioner, who is a registered dealer, on the file of the respondent under the provisions of the Tamil Nadu Value Added Tax Act, 2006, (hereinafter will be referred to a .....

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which was considered by the Hon 'ble Supreme Court in the case of Idea Mobile Communication Ltd., v. Commissioner of Central Excise and Customs, Cochin, reported in 2011 (23) S.T.R. 433 (S.C.), wherein the Hon 'ble Supreme Court held as follows:- 13. It would be appropriate to mention that later on the said Escotel Mobile Communications Ltd. merged with the appellant company i.e., M/s. Idea Mobile Communication Ltd. The aforesaid decision of the Kerala High Court was under challenge in .....

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cessories and was also paying Central sales tax and sales tax under the Kerala General Sales Tax Act, 1963 as applicable. The question was one of the valuation of these goods. The State Sales Tax Authorities had sought to include the activation charges in the cost of the SIM card. It was contended by Escotel that the activation was part of the service on which service tax was being paid and could not be included within the purview of the sale. The Kerala High Court also dealt with the case of BP .....

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on the issue. What a SIM card represents is ultimately a question of fact, as has been correctly submitted by the States. In determining the issue, however the assessing authorities will have to keep in mind the following principles: if the SIM card is not sold by the assessee to the subscribers but is merely part of the services rendered by the service providers, then a SIM card cannot be charged separately to sales tax. It would depend ultimately upon the intention of the parties. If the parti .....

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finally determined the issue. In any event, the High Court erred in including the cost of the service in the value of the SIM card by relying on the "aspects" doctrine. That doctrine merely deals with legislative competence. As has been succinctly stated in Federation of Hotel & Restaurant Assn. of India v. Union of India: (SCC pp. 652-53, paras 30-31) " ... subjects which in one aspect and for one purpose fall within the power of a particular legislature may in another aspec .....

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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 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 do .....

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The Sales Tax authority understood the aforesaid position that no element of sale is involved in the present transaction. 5. Thus, in the light of the above decisions, the legal position, which emerges is that there was no element of sale involved in the sale of Sim Cards or recharge vouchers. If the petitioner had filed appropriate returns, then there would not have been any problem in that regard and by applying the decisions of the Hon'ble Supreme Court, the Assessing Authority would hav .....

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submitted a representation, dated 29.07.2015, bringing to the notice of the respondent about the mentioning of the wrong commodity code. This request has been rejected by the respondent on the ground that the respondent did not find any reasonable cause for revising the assessment. 7. After hearing the learned counsels for the parties and after perusing the materials placed on record, two issues have to be pointed out in this writ petition. Firstly, the legal aspect cannot be disputed by the res .....

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