Karnataka High Court
The Deputy Commissioner Of vs M/S Bharti Airtel Services ... on 26 July, 2023
Bench: K.Somashekar, Rajesh Rai K
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NC: 2023:KHC:26015-DB
STRP No. 11 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. 11 OF 2023
BETWEEN:
1. THE DEPUTY COMMISSIONER OF
COMMERCIAL TAXES
(AUDIT- 5.5) DVO - 5
VANIJYA THERIGE KARYALAYA - 2
B BLOCK, 5TH FLOOR, 80 FT., ROAD
KORAMANGALA, BENGALURU - 560047.
2. THE JOINT COMMISSIONER OF
COMMERCIAL TAXES (APPEALS)-5
TTMC, BMTC BUILDING
2ND FLOOR, SHANTHINAGAR
Digitally
signed by D BENGALURU - 560 027.
K BHASKAR ...PETITIONERS
Location:
High Court (BY SRI. JEEVAN J. NEERALAGI - AGA)
of Karnataka
AND:
M/S. BHARTI AIRTEL SERVICES LIMITED
PLOT NO 3B, KADUGODI
INDUSTRIAL AREA, SADARAMANGALA,
WHITEFIELD, BENGALURU - 560067
REPRESENTED BY ITS
AUTHORIZED REPRESENTATIVE.
...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.160/2020.
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STRP No. 11 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.160/2020 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, among
other, engaged in the activity of the trading in mobile
phones as well as its parts and accessories. The
respondent sells the mobile phones in a composite pack
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
rectification as provided for under the provisions of the Act
pertaining to the assessment year in question subjecting
to tax, the sales turnover of mobile phone charger treating
the same as an unscheduled commodity. Being aggrieved
by the said order of rectification, respondent challenged
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STRP No. 11 of 2023
the correctness of the same by way of filing appeal before
the first Appellate Authority - Joint Commissioner of
Commercial Taxes (Appeals) - 5, Bengaluru. The same
came to be dismissed vide order dated 25.06.2020.
Against the said order, the respondent preferred an appeal
before the Karnataka Appellate Tribunal in STA
No.160/2020 which came to be allowed vide order dated
09.06.2022. Hence, this revision petition challenging the
said order.
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
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:
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STRP No. 11 of 2023
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)
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
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STRP No. 11 of 2023
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. 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.
Sd/-
JUDGE
Sd/-
JUDGE
DKB
