TMI Blog2016 (11) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... ime to file an Appeal - liberty is granted to the petitioner to file an Appeal before the Appellate Authority and if the Appeal is filed within a period of 30 days from the date of receipt of a copy of this order, the Appellate Authority shall entertain the Appeal without reference to limitation, as these Writ Petitions have been pending before this Court, since 2010 onwards. SIM Card - Held that: - the petitioner has stated that no sales tax can be charged on the value of SIM Card and in the petitioner's case since the SIM is merely incidental to the service, the petitioner has also given the details of the purchases effected by their vendors viz., M/s.Gemplus India P Ltd., and has also given the cost incurred by them and other details. This aspect of the matter, though was verbatim extracted by the Assessing Officer while completing the Assessment, erroneously stated that there are no records available. Even assuming if there are no records, nothing prevented the Assessing Officer to direct the petitioner to produce necessary records. Therefore, the Assessment on said head, calls for interference - the respondent shall afford an opportunity of personal hearing to the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tabulated format for four Assessment years is quoted herein below:- Sl. No. Income from Tele- cummunication Services Nature of Income Percentage on total demand 1 Airtime Charges These are charges collected from subscribers towards Extending Mobile Telephone Services by which subscribers can communicate to others while on the move and receive calls. These are call charges which are calculated on per minute basis. 11.46 2 Recurring Charges Represents fixed amount collected from subscribers every month towards usage of Mobile Services 35.37 3 Connection/ Activation Charges An amount collected for activating connection to a subscriber in the Net work. During activation details such as subscribers name, address and facilities that the subscriber is likely to avail is entered in the system 21.98 4 Public Switch Telephone Network ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received from the bankers for the short term deposits 14.31 3 Sale of Assets Sale of video conferencing equipments Plant and Machinery 0.26 4 Sale of scraps Sale of discarded materials, wooden scraps Newspapers - 5 Financial Charges from agent Finance charges recovered from agent on account of delayed receipt of receivables/outstanding - 6 Recovery from employees Received from resigned employees on account of notice period, as per terms and conditions of appointment letter - 7 Income from Volvo truck Own truck let on hire basis during idle time - Total income from sale of assets other miscellaneous income 14.71 1 SIM Card Providing Sim card to the customers in the course of services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards maintaining record of utilization of Telephone Service - 10 Residual Income It includes charges for the bills to the subscribers such as late fee, itemised billing, number changes, dehotlining charges reactivation charges 0.06 Sl. No. Income from Tele- cummunication Services Nature of Income Percentage on total demand 11 Miscellaneous service income One time processing fee, SMS one time enrollment fee expired talk time - 12 Lease Charges Charges subscriber for dedicated line to a - Total income from Telecommunication Services 94.45 Income from sale of assets other miscellaneous income 1 Rent from building Rent received from others w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for activating connection to a subscriber in the Net work. During activation details such as subscribers name, address and facilities that the subscriber is likely to avail is entered in the system 3.32 4 Public Switch Telephone Network (PSTN) These are charges collected from the subscribers. And paid to other operators. 16.00 5 Value Added Services These are charges for additional facilities such as call conferencing, SMS, Call wait etc. 2.75 6 Inter connect charges These are charges billed to customers towards call made to Telephone Nos. allotted by other Mobile Phone operators 0.01 7 Income from Bandwidth These are charges collected for browsing on cellphone. - 8 Plan Enrollment fee These are charges collected for maintaining details of tariff plan selected by a subscribers in the net work. 2.58 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Total income from sale of assets other miscellaneous income 1.72 1 SIM Card Providing Sim card to the customers in the course of services 0.70 - Total Turnover 100.00 FOR THE ASSESSMENT YEAR 2002-2003 Sl. No. Income from Tele- cummunication Services Nature of Income Percentage on total demand 1 Airtime Charges These are charges collected from subscribers towards Extending Mobile Telephone Services by which subscribers can communicate to others while on the move and receive calls. These are call charges which are calculated on per minute basis. 23.34 2 Recurring Charges Represents fixed amount collected from subscribers every month towards usage of Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total income from Telecommunication Services 96.74 Income from sale of assets other miscellaneous income 1 Rent from building Rent received from others who shared office premises with Aircel 0.01 2 Interest of deposits Interest received from the bankers for the short term deposits 1.94 3 Sale of Assets Sale of video conferencing equipments Plant and Machinery 0.65 4 Sale of scraps Sale of discarded materials, wooden scraps Newspapers - 5 Financial Charges from agent Finance charges recovered from agent on account of delayed receipt of receivables/outstanding - 6 Recovery from employees Received from resigned employees on account of notice period, as per terms and conditions of appointment letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing 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 parties intended that the SIM card would be a separate object of sale, it would be open to the Sales Tax Authorities to levy sales tax thereon. There is insufficient material on the basis of which we can reach a decision. However we emphasise that if the sale of a SIM card is merely incidental to the service being provided and only facilitates the identification of the subscribers, their credit and other details, it would not be assessable to sales tax. In our opinion the High Court ought not to have 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 Association of India Vs. Union of India (1989) 3 SCC 634- subjects which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment on said head, calls for interference. 12. Accordingly, these Writ Petitions are partly allowed on the following terms: (i) The findings with regard to the classification under Service Income (which is classified by the petitioner) which are Airtime charges, Recurring Charges, Connection / Activation Charges, Public Switch Telephone Network (PSTN), Value Added Services, Inter Connect charges, Income from Bandwidth, Plan Enrolment fee, Easy Deal Processing fee, Residual income, Miscellaneous service income, Lease charges, are set-aside and the matters are remanded to the Assessing Officer for fresh consideration. (ii) With regard to the finding recorded by the Assessing Officer under the heads viz., Rent from building, Interest of deposits, Sale of Assets, Sale of Scraps, Financial Charges from agent, Recovery from employees, Income from volvo truck, is concerned, liberty is granted to the petitioner to file an Appeal before the Appellate Authority and if the Appeal is filed within a period of 30 days from the date of receipt of a copy of this order, the Appellate Authority shall entertain the Appeal without reference to limitation, as these Writ Petitions have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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