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2024 (10) TMI 1247 - HC - VAT / Sales TaxLevy of Octroi by the various Municipal Councils - SIM Cards issued by the Bharti Mobile Limited and distributed in the State of Punjab, being sold in their municipal limits - whether SIM Card can be treated as goods ? - HELD THAT - The said question is no more res intergra, keeping in view the judgments passed by the Hon ble Supreme Court in BSNL Vs. Union of India 2006 (3) TMI 1 - SUPREME COURT and Idea Mobile Communication Ltd. Vs. Commr. of C. Ex. Cus., Cochin 2011 (8) TMI 3 - SUPREME COURT wherein the Hon ble Apex Court while examining the imposition of sales tax on the usage of SIM, held that sales tax can be imposed. The question of SIM card be goods was left to be further examined. However, in Idea Mobile s case , the Hon ble Apex Court has found that the SIM Cards to be never sold as goods independent from services provided. In view thereto, independently the SIM Cards cannot be termed as goods for the purpose of Octroi. There are no hesitation to hold that the SIM Cards which have been distributed in various Municipal Councils for the relevant period were not leviable to Octroi. Accordingly, the present writ petition is allowed and the notifications dated 26.07.2001(Annexure P-6), 08.08.2001 (Annexure P-7) and 30.10.2002 (Annexure P-8) are hereby set aside. Petition allowed.
Issues:
Whether SIM Cards distributed in the State of Punjab are leviable to Octroi by Municipal Councils. Analysis: The High Court examined whether SIM Cards can be considered as "goods" for the purpose of Octroi. Referring to judgments like 'BSNL Vs. Union of India' and 'Idea Mobile Communication Ltd. Vs. Commr. of C. Ex. & Cus., Cochin', the Court discussed the definition of Octroi and the concept of goods under the State Sales Tax Act. The Court highlighted that the Supreme Court in the BSNL case held that SIM cards are goods within the meaning of the State Sales Tax Act. However, in the Idea Mobile case, the Supreme Court clarified that SIM cards are never sold as goods independent from the services provided, thus not falling under the category of goods for Octroi purposes. The Court also cited the judgment of the High Court of Bombay in 'Bharat Sanchar Nigam Limited Vs. The State of Maharashtra', emphasizing the distinction between levying service tax and Octroi. It was noted that Octroi is based on the price at which a commodity is purchased and brought within municipal limits, not on the selling price. The Court concluded that Octroi cannot be levied on the talk time or SIM cards, especially when they are not sold as distinct objects of sale. Furthermore, the Supreme Court upheld the view that SIM cards are not goods for Octroi purposes in the case of 'Bharat Sanchar Nigam Ltd Vs. The State of Andhra Pradesh Revenue Department'. The Court referenced various judgments to support this position and found no reason to interfere with the High Court's decision. Consequently, the High Court held that SIM cards distributed in Municipal Councils were not leviable to Octroi, setting aside the relevant notifications. In conclusion, the Court allowed the writ petition, dismissing all pending applications and clarifying that SIM cards do not qualify as goods subject to Octroi, based on the interpretations provided by the Supreme Court and previous judgments.
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