The Kerala High Court has quashed the assessment order passed under the Kerala Value Added Tax Act, 2003 (hereinafter the “KVAT” Act) by holding that SIM cards, rechargeable coupons, fixed monthly charges, and value-added services provided in relation to SMS, ringtones, and download music cannot be treated as “goods”, therefore no levy can be imposed under the KVAT Act.
The writ appeal arose from an assessment order passed against the appellant, which was initially challenged before the High Court on grounds of limitation and merits. The Single Judge set aside the assessment order on the ground of limitation. Thereafter, the State filed an appeal, and the Division Bench set aside the judgment, holding that the assessment order was issued within the six-year limitation period under Section 25(1) of the KVAT Act.
Subsequently, many writ petitions involving the same issue were decided by the Single Bench, holding that the SIM cards, rechargeable coupons, and value-added services cannot be termed as “good” for the KVAT Act by relying on Andhra Pradesh v. Bharat Sanchar Nigam Ltd. (2012) 49 VST 98 judgment, as affirmed by the order of the Supreme Court.
In the present appeal, the Division Bench comprising Justice A.K. Jayasankaran Nambiar and Justice Jobin Sebastian has observed that since the final decision on the issue already decided in the above-mentioned case, would be meaningless to relegate the assessee to pursue the statutory authorities. Accordingly, the High Court allowed the writ appeal by quashing the assessment order to the extent it demanded VAT on telecom receipts, holding that such receipts do not constitute a sale of goods under the KVAT Act.
Appearance:
For Appellant: Senior Advocate A. Kumar, along with G. Mini, P.J. Anilkumar, And P.S. Sree Prasad.
For Respondent: Special G.P. Mohammed Rqfiq, along with Standing Council V. Girish Kumar.
