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2016 (11) TMI 1537 - HC - VAT and Sales TaxRate of tax - mobile battery chargers (MBC) sold along with the mobile phones itself - KVAT Act - Held that - the issue is decided in the case of Lava International Limited v. State of Karnataka 2016 (12) TMI 60 - KARNATAKA HIGH COURT where it was held that the mobile battery chargers have been held to be only the accessories of mobile phones and they cannot be treated as part of the mobile phones itself. It will definitely attract a separate rate of tax as in the present case it is rightly charged at 14.5% - petition dismissed - decided against petitioner.
Issues:
Interpretation of tax rate for mobile battery chargers sold with mobile phones under the Karnataka Value Added Tax Act, 2003. Analysis: The High Court addressed the controversy regarding the tax rate applicable to mobile battery chargers (MBC) sold with mobile phones under the Karnataka Value Added Tax Act, 2003. The court relied on a previous decision in the case of Lava International Limited v. State of Karnataka and the Supreme Court judgment in the case of State of Punjab v. Nokia India Pvt. Ltd. The Supreme Court decision clarified that mobile battery chargers are accessories to mobile phones and not integral parts, hence to be taxed separately regardless of being sold together in a package. The petitioner contended that since the entry under the Punjab Act differed from the KVAT Act, 2003, and the entry was adopted from Central Excise law, the MBCs sold with mobile phones should be taxed at the same rate as the phones themselves. However, the court rejected this argument, emphasizing the clear ruling of the Supreme Court that MBCs are distinct accessories and not part of mobile phones, warranting separate taxation irrespective of packaging. The court emphasized that the Supreme Court's decision is binding on all courts and authorities in the country, not limited to specific tax rate entries in different states. Therefore, the court dismissed the petitioner's contention and advised them to raise other assessment issues before the appellate authorities under the Act, preserving their right to challenge the assessment orders through the appropriate appellate process. Consequently, the writ petitions were dismissed without costs.
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