Decided on April 23,2010

Bharti Airtel Limited And Anr. Appellant
Assistant Commissioner Of Sales Tax, Salt Lake Charge And Ors. Respondents


Dipak Chakraborti, Technical Member - (1.) IN this petition filed under Section 8 of the West Bengal Taxation Tribunal Act, 1987, the petitioners, (i) Bharti Airtel Limited (formerly known as " Bharati Tele -Ventures Limited), a limited company incorporated under the Companies Act, 1956 having its registered office at H -5/12, Qutab Ambience, Mehrauli Road, New Delhi 110 030 and principal office in West Bengal at Infinity Building, Sector V, Block -EPGP, 5th Floor, Salt Lake Electronic Complex, Kolkata 700 091 and (ii) Sri Tuhin Chatterjee, working for gain at the said address at Salt Lake Electronic Complex, have challenged the order dated June 26, 2007 passed by the Assistant Commissioner of Sales Tax, Salt Lake Charge (in short, "respondent No. 1") in relation to the assessment made under the West Bengal Sales Tax Act, 1994 (in short, "the 1994 Act") pertaining to the assessment period four quarters ending on March 31, 2005.
(2.) THE petitioner -company, as claimed in this petition, is engaged in the business of providing cellular mobile telephone service (CMTS) to various subscribers in India including West Bengal. In the course of providing such CMTS, the petitioner -company during the year in question supplied or caused to be supplied subscriber identification module card (SIM card) and recharge coupon vouchers (also known as cash cards). As it appears from the order dated June 26, 2007, respondent No. 1 held that SIM cards were goods and supply of SIM cards by the petitioner -company to its distributors fell within the meaning of sales of taxable goods as per provision of the 1994 Act. Similarly, it was held by respondent No. 1 that supply of recharge coupon vouchers against consideration meant sale of goods. The petitioners are represented by Sri R. N. Bajoria, senior advocate, Sri S. K. Bagaria, Sri Atish Ghosh and Sri Niladri Khanna, advocates, whereas Sri P. Basu, senior advocate along with Sri B. Bhattacharyya, advocate, represent the respondents. Both the sides have submitted written notes of arguments.
(3.) INITIATING the arguments, Sri Bajoria, learned senior advocate, points out that the question of taxability of SIM cards had been agitated in several cases of telecom service providers. Ultimately, the honourable apex court in the case of Bharat Sanchar Nigam Ltd. v. Union of India, [2006] 3 VST 95 :, [2006] 145 STC 91 held that full facts regarding the function and nature of SIM cards had to be ascertained before deciding whether the transaction relating to its transfer was one of sale of goods or rendering of telecom services. The learned senior advocate further submits that after the decision of the Kerala High Court in the case of Escotal Mobile Communications Ltd. v. Union of India, [2002] 126 STC 475, the petitioner started collecting sales tax on transfer of such SIM cards to its distributors. The tax so collected was also deposited to the State exchequer. In view of the position, learned senior advocate categorically submits that the petitioners do not wish to agitate the issue in the present application only because of the fact that the tax so deposited cannot be refunded now even if it is held that the transfer of SIM cards does not tantamount to sale. The petitioners, as submitted by the learned senior advocate, however reserve the right to agitate this in respect of other years.;

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