2009 (3) TMI 558 - SC - VAT and Sales Tax

Whether broadband connectivity for data transmission is exigible to tax under the Karnataka Value Added Tax Act, 2003? Held that - In our view the learned single judge was right in directing the assessee to exhaust statutory alternate remedy. Looking to the nature of the concept involved in these matters (in which technical evidence needs to be looked into and cross-examination of the experts is warranted)the matters need adjudication.

Summary

The Supreme Court of India, in the case of KAPADIA S.H. AND AFTAB ALAM JJ., addressed the issue of whether broadband connectivity for data transmission is subject to tax under the Karnataka Value Added Tax Act, 2003. The Division Bench of the High Court had to determine this question. The Court agreed with the learned single judge's decision to direct the assessee to pursue statutory alternate remedies. Given the technical nature of the concept involved, the Court deemed that the matters required adjudication. The impugned judgment was set aside, and the assessees were directed to file statutory appeals within four weeks. The first appellate authority was instructed to hear and dispose of the appeals expeditiously, preferably within three months. The authority was also directed to consider the appeals on their merits, without being influenced by the High Court's observations. Assessees were required to file their returns in compliance with the law, without prejudice to their rights and contentions in the pending appeals. The special leave petitions were disposed of accordingly.