Karnataka High Court
The State Of Karnataka vs Redington India Limited on 26 July, 2023
Bench: K.Somashekar, Rajesh Rai K
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NC: 2023:KHC:26014-DB
STRP No. 23 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 26TH DAY OF JULY, 2023
PRESENT
THE HON'BLE MR JUSTICE K.SOMASHEKAR
AND
THE HON'BLE MR JUSTICE RAJESH RAI K
SALES TAX REVISION PETITION NO. 23 OF 2023
BETWEEN:
1. THE STATE OF KARNATAKA
REPRESENTED THROUGH
THE DEPUTY COMMISSIONER OF
COMMERCIAL TAXES (AUDIT 4.7)
DVO-4, V T K -2, KORAMANGALA
BENGALURU-560047.
2. JOINT COMMISSIONER OF
COMMERCIAL TAXES (APPEALS)-4
Digitally
signed by D BENGALURU TTMC, B BLOCK
K BHASKAR BBMTC BUILDING, 2ND FLOOR
Location: SHANTHINAGAR, BENGALURU.
High Court ...PETITIONERS
of Karnataka
(BY SRI. JEEVAN J. NEERALAGI - AGA)
AND:
REDINGTON INDIA LIMITED
"SHREE NARAYANA TOWER"
NO.14, 1ST AND 2ND FLOOR
5TH SECTOR, HSR LAYOUT
HOSUR SARJAPURA ROAD
BENGALURU-560102.
...RESPONDENT
THIS STRP FILED UNDER SEC.65(1) OF THE KARNATAKA
VALUE ADDED TAX ACT, 2003 PRAYING TO: SET ASIDE THE
ORDER DATED 09.06.2022 PASSED BY THE KARNATAKA
APPELLATE TRIBUNAL, BENGALURU IN S.T.A.NO.273/2019.
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STRP No. 23 of 2023
THIS SALES TAX REVISION PETITION, COMING ON FOR
ORDERS, THIS DAY, RAJESH RAI K .J., MADE THE
FOLLOWING:
ORDER
This revision petition is filed by the petitioners
against the order passed by the Karnataka Appellate
Tribunal in STA No.273/2019 dated 09.06.2022.
2. The brief facts of the case is that the respondent is
a dealer registered under the provisions of the Act,
engaged in the activity of the trading in mobile phones as
well as its parts and accessories. Authorised wholesale
dealer / distributor places an order, the respondent sells
the mobile phones in a sealed packet which would also
contain accessories such as Head Set, Cables, Ejection Pin,
Adaptor (Mobile Phone Charger) etc. The Assessing
Authority had passed an order of re-assessment under
Section 39(1) of the Act pertaining to the Assess Year
2014-2015 subjecting into tax, the sales turnover of
Mobile Phone Charger, treating the same as an
unscheduled commodity. Being aggrieved by the said
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STRP No. 23 of 2023
order of re-assessment dated 21.12.2018, respondent
challenged the correctness of the same by way of filing
appeal in VAT.AP No.125/2018-19 before the first
Appellate Authority - Joint Commissioner of Commercial
Taxes (Appeals)-4, Bengaluru. The same came to be
dismissed vide order dated 16.06.2019. Against the said
order, the respondent preferred an appeal before the
Karnataka Appellate Tribunal in STA No.273/2019 which
came to be allowed vide order dated 09.06.2022. Being
aggrieved by the said order the State has preferred this
revision petition by urging various grounds.
3. We have heard Sri Jeevan J.Neeralagi, learned
AGA for the petitioners and perused the impugned
judgment and so also, the materials placed before us.
4. Learned AGA fairly submitted that the issues
involved in this revision petition are covered by the order
passed by a co-ordinate Bench of this Court in STRP
No.8/2022 and connected matters dated 10.02.2023. On
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STRP No. 23 of 2023
careful perusal of the order passed in STRP No.8/2022 in
Para - 26 and 27 of the said order it is held as under:
26. The mobile phone finds its place in III Schedule
and taxable at 5% and therefore, the charger which is
also sold along with mobile phone in 'one set' is
together chargable at 5%. This view is in consonance
with the law laid down by the Apex Court in CIT Vs.
B.C.Srinivasa Setty (1981) 5 Taxmann 1 (SC),
wherein it is held that the charging section and the
computation provisions constitute an integrated code
and if these two requirements are not jointly present,
no tax can be levied or sought to be recovered. The
relevant portion of the judgment reads as follows:
"10. ...A transaction to which those provisions
cannot be applied must be regarded as never
intended by Section 45 to be the subject of the
charge. This inference flows from the general
arrangement of the provisions in the Income
Tax Act, where under each head of income the
charging provision is accompanied by a set of
provisions for computing the income subject to
that charge. The character of the computation
provisions in each case bears a relationship to
the nature of the charge. Thus the charging
section and the computation provisions
together constitute an integrated code. When
there is a case to which the computation
provisions cannot apply at all, it is evident that
such a case was not intended to fall within the
charging section..."
(Emphasis Supplied)
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STRP No. 23 of 2023
27. A bare perusal of the Section 4 (charging section)
of KVAT Act and Rule 3 (computation provision) of
KVAT Rules would clearly indicate that there is no
prescribed mechanism provided for determining the
value of individual goods in a composite transaction.
Thus, in the absence of a valuation mechanism, tax
cannot be levied differently on each of the component
by separating a single composite package.
5. Hence, in view of the order passed by the co-
ordinate Bench in the aforesaid revision petition, we are of
the considered opinion that there is no merit in this
petition and the same is liable to be dismissed being
devoid of merits. Hence, the following:
ORDER
(i) Revision petition is hereby dismissed.
(ii) The substantial question law is answered in
favour of the Assessee and against the
Revenue.
(iii) No costs.
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STRP No. 23 of 2023
In view of dismissal of the revision petition,
I.A.2/2023 for stay does not survive for consideration.
Accordingly, it is disposed of.
Sd/-
JUDGE
Sd/-
JUDGE
DKB
