SRI PADMAVATHI VENKATARAMANA TRADERS Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THE appeal has been filed challenging the orders passed by the Deputy Commissioner (CT), Kurnool (Hereinafter referred as the Revisional Authority) in Rc. No. 50/2006 -07, dated 21.03.2007 by which the assessment orders passed by the Commercial Tax Officer -II, Kurnool in Rc. No. KNL/10/2/2436/2004 -05; dated 04.10.2006 have been revised. The brief facts of the case are as follows. The appellant M/s. Sri Padmavathi Venkataramana Traders, Kurnool are the registered dealers on the rolls of Commercial Tax Officer -II, Kurnool (Hereinafter referred as the assessing authority). The assessing authority by his Proceedings dated 04.10.2006 passed final assessment orders for the assessment year 2004 -05 under the APGST Act, 1957. The Assessing Authority mainly had relied on the orders of the Appellate Deputy Commissioner (CT), Kurnool in the case of M/s. Maram Ramachandraiah & Sons Vs. Commercial Tax Officer -II, Kurnool in Appeal No. 16/2005 -06, dated 14.07.2006 and withdrawn the proposal of levying sales tax on the turnovers relating to the sale of Recharge coupons and Sim cards in this case. The Appellate Deputy Commissioner (CT) in the said appeal, for the assessment year 2005 -06, placed reliance on the judgment of Hon'ble Supreme Court in the case of 20th Century Finance Corporation Limited & Another Vs. State of Maharashtra reported in : (2000) 119 STC 182 and held that the amounts collected by the appellant in that case, (by M/s. Maram Ramachandraiah & Sons, Kurnool) are only towards services and not towards the sale of goods.

(2.) THE Revisional Authority has opined that the second sales of recharge cards and sim cards involving a turnover of Rs. 72,16,051/ - for the assessment year 2004 -05 is liable to tax under Section 5A of the APGST Act, 1957 and that the said turnover relate to the sale of Recharge cards and it is not in the nature of service. Accordingly, a show cause notice, proposing to revise the assessment order was issued and the appellants have filed their reply to the said show cause notice. The Revisional Authority, having considered the reply submitted by the appellant held that the recharge coupons have got all attributes of goods and that it has got utility and capable of being bought and sold, transferred, delivered, stored and possessed, hence they are goods. The Revisional Authority further held that the appellants had not furnished any information on Sim -cards, hence entire turnover has been treated as pertaining to recharge coupons only. Aggrieved by the same, this appeal has been filed.

(3.) THE Learned State Representative supported the impugned orders and submitted that the assessing authority has relied on the order of the Appellate Deputy Commissioner (CT), Appeals, which pertains to the assessment year 2002 -03, but this assessment year is 2004 -05 and the principle of Res judicata does not operate in tax matters. He placed reliance on the decision of Hon'ble High Court of A.P. in the case of M/s. Raasi Cement Limited Vs. Commissioner of Commercial Taxes reported in : 39 APSTJ 177. It is his submission that a telephone set or a dish antenna will not automatically grant a viewer any right to use electromagnetic waves or radio frequencies, but still, they are goods. It is his submission that recharge coupons/cards can be possessed, delivered or stored and they are used for renewing a phone connection by any subscriber. It is his further submission that recharge coupons can change hands any number of times before they are used by the end -customer. It is also his submission that recharge coupons are good's just as Exim scrips and REP licenses. It is further submitted that the Hon'ble Supreme Court in the case of M/s. Vikas Sales Corporation Vs. Commissioner of Commercial Taxes reported in : 102 STC 106 held that Exim Scrips and REP Licenses are goods. It is also submitted that if any service is provided as such, no tax can be levied under Sales Tax Act, but if any service flows out of any goods, on that plea, the 'goods' cannot be termed as 'Service'.