UNION OF INDIA, REP BY ITS CHIEF SECRETARY Vs. BHARAT SANCHAR NIGAM LIMITED,A GOVT OF INDIA ENTERPRISE

JUDGEMENT

(1.) This appeal is by the defendants in O.S.No.67/2007 on the file of the II Additional District Judge at Purudhcerry are the appellants.

(2.) The said suit was filed by the plaintiff/respondent herein viz., Bharat Sanchar Nigam Limited seeking refund of a sum of Rs.5,35,643/- [Rupees Five Lakhs Thirty Five thousand Six Hundred and Forty Three Only] with subsequent interest at 12% p.a., representing the Sales Tax collected by the appellant for the sale of SIM Cards and activation charges for the mobile phone services provided by them. According to the plaintiff, they are a Government organisation engaged in providing mobile phone services. In the course of its business, it provides SIM Cards to its customers who avail its Telecommunication Services and also collect activation charges from them. While so, the appellants demanded Sales Tax on the value of the SIM Cards and activation charges. Though, according to the 1st respondent/plaintiff, such tax is not payable by them as per the judgement of the Hon'ble Supreme Court. However, they had paid the tax under protest before pronouncement of the judgement by the Hon'ble Supreme Court. Finally, the Hon'ble Supreme Court in Bharat Sanchar Nigam Limited and Another -Vs- Union of India and Others, 2006 3 SCC 1 had held that no Sales Tax is payable for sale of SIM Cards or activation charges collected by the respondent/plaintiff. In view of the said judgement, the plaintiff had made several requests to the defendants seeking refund of the tax collected. Since the defendants did not come forward to refund the tax, the plaintiff had filed the above suit for recovery of a sum of Rs.5,35,643/- [Rupees Five Lakhs Thirty Five thousand Six Hundred and Forty Three Only] which includes interest on the sum of Rs.3,97,050/- [Rupees Three Lakhs Ninety Seven thousand and Fifty Only] paid as Sales Tax for the period from 2002 to 2005.

(3.) The suit was resisted by the defendants/appellants contending that the suit is not maintainable in view of Section 55 of Pondicherry General Sales Tax Act, 1967 and Section 69 of the Puducherry Value Added Tax Act, 2007. It was further contended that the Supreme Court had not finally held that the sale of SIM Cards would not attract Sales Tax. It had only left it open to be decided by the concerned authority. Therefore, according to the defendants, they have the right to assess and determine whether the sale of SIM Cards would attract Sales Tax.