2010 (4) TMI 983 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Taxability of SIM cards.
2. Taxability of recharge coupon vouchers.

Summary:

1. Taxability of SIM cards:
The petitioners, Bharti Airtel Limited and Sri Tuhin Chatterjee, challenged the order dated June 26, 2007, by the Assistant Commissioner of Sales Tax regarding the assessment under the West Bengal Sales Tax Act, 1994, for the period ending March 31, 2005. The Assistant Commissioner held that SIM cards were goods and their supply constituted a sale of taxable goods u/s 1994 Act. The petitioners did not wish to contest this issue further as the sales tax collected on SIM cards had already been deposited and could not be refunded.

2. Taxability of recharge coupon vouchers:
The primary issue was the taxability of recharge coupon vouchers. The petitioners argued that recharge coupon vouchers, which provide access to telephone services, should not be considered goods but actionable claims. They relied on the definition of "goods" u/s 2(13) of the 1994 Act and the definition of "actionable claims" u/s 3 of the Transfer of Property Act, 1882. The petitioners contended that recharge coupon vouchers represent a beneficial interest in movable property and are thus actionable claims, not goods.

The respondents argued that recharge coupon vouchers do not qualify as actionable claims since they do not represent a debt or beneficial interest in movable property. They asserted that recharge coupon vouchers relate to "talk time," which cannot be considered movable property.

The Tribunal, referencing the Supreme Court's decision in Sunrise Associates v. Government of NCT of Delhi, concluded that recharge coupon vouchers are actionable claims. They provide a right to telecom services, which is a beneficial interest in movable property. Therefore, recharge coupon vouchers are not taxable as goods.

Conclusion:
The Tribunal set aside the assessment order dated June 26, 2007, and remanded the matter back to the assessing authority for fresh assessment, considering the observations made. The petition was disposed of with no order as to costs.