In a recent ruling, the Karnataka High Court held that the levy of separate rate of tax on the mobile phone chargers is valid since the same cannot be treated as part of mobile phones.
The Court was hearing a writ petition filed by M/s S & S Co. The question before the court was the taxability of Mobile Phone Chargers sold along with the Mobile Phones under the Karnataka VAT Act. The bench noted that the matter is squarely covered by the decision in M/s Lava International Ltd’ s case which was based on the Apex Court’s decision in the state of Punjab v. Nokia India Pvt Ltd case wherein the Apex Court upheld the separate rate of tax on these commodities under the Punjab Act.
The petitioners contended that the Punjab Act was different from the KVAT Act, 2003, and here since entry in question is adopted from Central Excise law, therefore, according to the Rules of interpretation under Excise Law, the Mobile Battery Chargers (MBC) sold along with the Mobile phones, in one retail package should be treated as taxable at the same rate as the Mobile phone itself under the Third Schedule to the KVAT Act, 2003, at the rate of 4% only.
Rejecting the contention, the Justice Vineeth Kothari noted that, from the apex Court decision in Nokia India Pvt.Ltd case, is very clear that the Mobile Battery Chargers, cannot be treated as part of the Mobile Phones itself and they are mere accessories of the Mobile Phone and are to be taxed separately irrespective of their packing in the common package with Mobile phones.
Dismissing the petition, the bench said, “the said binding precedent from the Apex Court is binding on all Courts/authorities in the Country. It is not based only on particular entry for tax rate under any particular State. Therefore, this Court is not inclined to entertain this contention of the assessee. The other issues of assessment have already been left open to be raised before the appellate authorities under the Act, as the petitioner has an alternative remedy against the impugned assessment orders and therefore they have been left free to agitate those points before such appellate authorities.”
Read the full text of the Judgment below.
