W.P. No.7926/2006
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
BENCH AT AURANGABAD
WRIT PETITION NO.7926 OF 2006
Bharat Sanchar Nigam Limited,
through its Sub-Divisional Engineer (PRO),
Office of General Manager, Telecom,
Nanded, Namdeo s/o Ramdas Kusangwar,
Age 47 years, Occ. Service ... PETITIONER
VERSUS
1. The State of Maharashtra
through its Secretary,
Urban Development Department,
Mantralaya, Mumbai
2. Nanded Municipal Corporation,
through its Commissioner,
Nanded ... RESPONDENTS
.....
Shri Alok Sharma, Advocate for petitioner
Mrs. V.C. Choudhary, A.G.P. for respondent No.1
Shri M.D. Narwadkar, Advocate holding for
Shri M.V. Deshpande, Advocate for respondent No.2
.....
CORAM: RAVINDRA .V. GHUGE AND
SUNIL K. KOTWAL, JJ.
DATED : 9th NOVEMBER, 2017.
ORAL JUDGMENT (PER RAVINDRA V. GHUGE, J.):
1. Learned Advocates for the litigating sides submit that, they have no objection if this Court hears this petition. ::: Uploaded on - 14/11/2017 ::: Downloaded on - 15/11/2017 01:08:19 :::
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2. By this petition, the petitioner has put forth its prayers in para No.28(B) and (C) as under :--
(B) The respondent Nos.2 and 3 may kindly be directed to release 5000 SIM Cards by charging levy @ Rs.4% on the Invoice value i.e. on 0.76 ps.
(C) The respondent No.2 may kindly be directed that, the Octroi on all future imports of SIM/ ITC Cards. Rechearge Coupons should be levied @ Rs.4% on the Invoice value of the same i.e. only on 0.76 Paise/ Card.
3. We have considered the submissions of Shri Alok Sharma, learned Advocate for the petitioner, learned A.G.P., on behalf of the State and Shri Narwadkar, learned counsel on behalf of the respondent No.2 Municipal Corporation.
4. The grievance of the petitioner is that, the 5000 SIM cards along with some Recharge coupons that were imported, were actually purchased by the petitioner at the rate of Rs.0=76 ps. per card. The purchase price that the petitioner was required to pay was at the rate of Rs.0=76 ps. per Card/ Recharge voucher. The invoice indicated the number of the cards imported, its purchase price and the total amount which the petitioner had paid as the purchase cost of the said consignment. ::: Uploaded on - 14/11/2017 ::: Downloaded on - 15/11/2017 01:08:19 :::
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5. It is further canvassed that, these SIM Cards are not sold as an item, per se, but are handed over to a service subscriber (customer) as a part of the subscription package while granting him the connection of a cellular phone. The talk time and the package is a matter of policy decision which is taken by the competent authority. Such pricing of the package would vary from State to State and would also be subject to change considering the limits of the area in which they are utilised, keeping in view the taxes levied on the same.
6. It is then submitted that, the SIM card would be the same as may be handed over to the subscriber, who opts for a cellphone connection for monthly charges. With the option of prepaid/ postpaid, the said charges would depend upon the talk time plan which is selected by the consumer. The SIM card would be the same, but the talk time plan and the charges thereof would vary from person to person as per his choice. The grievance, therefore, is that, the octroi which can be levied by the competent authority and admittedly @ 4% on the commodity, would be based on the price at which the commodity has been purchased by the petitioner keeping in view that each SIM card would be subject matter of a varying talk time plan that a consumer may opt for.
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7. Learned counsel for the Corporation has submitted that, normally octroi is levied on the receipt of payment indicating the price that is paid by the person who is receiving the consignment on its purchase. However, the Corporation has considered the talk time as one of the components, on the basis of which the octroi has been levied.
8. We find that, a similar issue was subject matter of adjudication at the hands of the Hon'ble Supreme Court (3 Judges Bench) in the matter of Bharat Sanchar Nigam Limited & anr. Vs. Union of India & ors. reported in 2006 AIR SCW 1266. In para No.87 of the judgment, concerning the SIM card, the Hon'ble Apex Court has concluded as under :
"87. It is not possible for this Court to opine finally 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 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 ::: Uploaded on - 14/11/2017 ::: Downloaded on - 15/11/2017 01:08:19 ::: W.P. No.7926/2006 (( 5 )) 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 in one aspect and for one purpose fall within the power of a particular legislature may in another aspect and for another purpose fall within another legislative power. They might be overlapping; but the overlapping must be in law. The same transaction may involve two or more taxable events in its different aspects. But the fact that there is overlapping does not detract from the distinctiveness of the aspects." No one denies the legislative competence of States to levy sales tax on sales provided that the necessary concomitants of a sale are present in the transaction and the sale is distinctly discernible in the transaction."
(Emphasis supplied)
9. It is, therefore, obvious that, under the Sales Tax Act, until the Department can point out specific instances when the BSNL would intend to sell the SIM Card as a separate object of sale, it cannot be concluded that the sales tax can be levied on the amount of sale. This issue was with regard to the sales tax ::: Uploaded on - 14/11/2017 ::: Downloaded on - 15/11/2017 01:08:19 ::: W.P. No.7926/2006 (( 6 )) where the tax was to be paid on the amount of money received by the BSNL after a particular commodity was sold.
10. The principle of levying service tax is distinct and different from the principle applied to levy of octroi. Sales tax can be levied on the amount at which a particular commodity is sold. Octroi is to be levied on the price for which a particular commodity is purchased. It could be open to a sales tax authority to consider the price at which the commodity is sold so as to levy sales tax. This principle cannot fall within the domain of the authorities who are empowered to levy octroi, as octroi is not dependent upon the price at which the commodity is sold, but depends on the price at which the commodity is purchased and brought within the Municipal Corporation limits of a particular place. Octroi cannot be levied on the talk time which would be a subject of the choice of a customer.
11. Considering the above, we find that, the reason assigned by the Corporation to levy octroi on the price at which the petitioner may intend to sell its SIM card, provided it is sold as a distinct object of sale, is an unsustainable ground and is not supported by any provision of law which has been cited before us.
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12. This Court, by its interim order dated 8.12.2006, has released the SIM cards confiscated by the respondent No.2 authority.
13. Considering the above, this petition is allowed in terms of prayer clauses 28(B) and (C). Rule is made absolute in the above terms.
( SUNIL K. KOTWAL ) ( RAVINDRA V. GHUGE )
JUDGE JUDGE
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