Karnataka High Court
M/S Bharti Airtel Ltd vs The State Of Karnataka on 25 February, 2011
Bench: N.Kumar, Ravi Malimath
?
5: The C<>mmiss§<;ne§ of Scrvicc T22): in
Ka:'::aEai<;a.;
E94" Fieor} S.?.C<}mp1€:><:,
No.16} Lai Bagh Read;
Bangaiore ~ 560 9221 4- _ "
{By Sri T.K.Veda Murthgx, AGA for 1
Sri N.R.Bha:=.kar, Seaniar Standifiig Cauncil fer C.Ein:%a_;?~..v
Govsrnment for R4 R5737
This Writ App€:aI"~..filed 3,;Vri'd-:§r,v'$§:<:Ei<>n 4 of the
Karnataka High Court }5xC1j'pfay}}n§g téfsezt 'aside the order
passed in the: Writ P'e'::i_t:91}: fiNG';.2iS_;39--;'2{31G dated
07.01.2011' ' I 4.
wA.N0.79_o.; :49 * BETWEEN: ,- ' M /' S. B__ha:'at Sa:a<:ha':* _Nig_ai:*1 Lt;d., Doorasamparka B'hén,>au.._ ». _ No' 1, Swezmy \/'ix%'€ké§;1'and'aLV Road, Bangalore 4-560 .008;
Repfééczrited b'y.i}:S G€i'1%:.ra}._L VMa_nag€r",' ~-- ----- -« "
" Mr f3 . Ch a:fl_d";g}m0uh. g..APPELLAN'T . _ Kumar KPSD Parmers and S:i.AEa} K;}"gi__11r', Advocates} " §; S}:at<§ of Karnataka * Finance Departmsni, Védhana Soudha, Bangaloré - 5630 G01;
8}; its Préncépai S€';'C§"€i8f°:y'. third respendem has, {hr<>u§.§h 5;-i:é*e;~:ee;;& eorzjeeture, surmises, Efiéd {<2 the Horfbie itéupeeme aggrieved by the imp%,1-§.;e'ed"'--<}'rdee ' L'h.€_3A Veiepefiiaei preferred the Writ Pe:£{I<§n.3e * } » _
18. The iearneef J--:':dg'e..:_';h:3S refused to entertain the that the BSNL judgmeneef epen ended judgment and ire;z'eé":vi'ea'::for1 of phenomena} seienveifie' data are not well equipped to Vdeai and reiegated the appefiam to ti.ie':appei1.ate aiitrge-1*-iiy. Aggrieved by the said order 0:" the V 'Judge, these appeals are filed' the facts set oui above in these Vv'r?;:
Appeais' é.';f;'s clear that, the question imzelved in all these A appeavkiis one and the same.
:20. The reSp(mdem--S:ate has {Bed 31 eemmen A":s:é.Atemen: of ebjeetiene. In the stamment ex? czbjeetiene} Ehey have raised a preiiminarjv ebjeitéhim regaréing the g 1'/,,, Section :65 {E 0f§?aj¥ "telecommunication service" znesms sem:eee'-. e of cmg deseripzéo:/2 pz"ozn}:§e(f Z35; é'?'E<??CZ?"£S OJ:{:"¥:€xF:i:j'._ Erczrzsrnésséon, emission of reeepiiozez, of"~:3ig2;z$,. ' signafsfi wrizing, images S§T§u,?'Z{;:I?S--.:»C*§9"
inteiligenoe or izzfomzatzorz Vaof .:e:<ze3.;§:/z%:::L€zie;"-byg"-.,_ wire} racfio, opzicoi, 5,2235%: of ._ or V a3Aéhe}' eieozromagneiio rrzecms'.._o%~~._Asys:er:;s,' -i:'ao§u{:Eiri§"' ' {he reiated Zz*cm,sfer or _c_4_§é'ég_nm_Verzt offhe rig?/it to use oapa'Lé.zf§'"~ for S:}:o]_c;._'izfanemission; emission or reception :2 p.ez'°:é_orVz 'who has been grahi'eoZ a:'ZiCer:ee €?ze~f:3'sZ proviso to s;gE':;se5 "z;o.z3.,:';l';} VSeofioz{ the Incéicm Tez;~gra;;'§'h."'A'cz; "of 2885] and :':1"eZ:,z;:Zié;s-"'*§:.-- = V';._{'z') .V'o:'<;'e.,'4%o;o1di'E§._hiaia services, audio {ex 'eésezvieesg ""z;:::¢2;e:§ {ex services} radio » pfagzfzvl.g;
V{izTjV Fzliéikug _____ Jfeiephorze services inefuding . '~p2*ovisio7z of access: to azezof use of the VVvp:4a.oEie swéfcfied iefephozze ;<:e?:wori€ for {fie transmeission and swz'E<:hirzg of voice, data and video; inbound and ouzboimoi telephone se2"z2ic:e to and from nafionoi {E52255 érzzerzezgziiozezaf desiérzozions,' {iii} Ceiiuiar mobife feiegflzeorze serz/flees izzoizzdizezg pz'oz22L<;io:r2e of oiocress ffo cznoé' use ii 9* A' 'K (iv;
f¢r._ai--. fee kgczudmg cazg 6 5}} cf szezjézeizecf or z":eaz:e~sw:'2'c%'zeo? ?"E£?fE/:i,fC}?';%:S for the zrcmsrzizisséoret: sf voice, :CZ?.7,{}?"-. 'T widea, ézzbazmed amt? ozzfbounci ' service 50 and frem ?"Z{7JZfiKC??"ZCE,'3_ " s:z:"zz:f_ izztezirzaiionai c§esZz'zeza€_zim.'2..s;_ Cczrrier sea":/siees Z4?'lCE;§x'{2?Z'?'}§j, ;:~ree~z;z':%:z'A< )%'z. wired or wireless f::zCi£:'.fée:--:._ {:0 o2fé§g:'ze':.c:€e; ierrrzérzczte or zrcm_s€'é._ACaeZZe, .__eI*z(2.V;"g"é:f1gVi'~--:_f}:ir" ' intercom:/zeczéon, V"-..Vse.t_ZZernen-2? _ ier ter2nénaZ2'f0__::"'0f c.Z0m_eézz7<j vQf"«irzZer72,aZionez2E sails, charging far jevirzélgf *3.€_'s.eci'_.fa<:iZi:ies inciudirzg pole' a¥tfQ'c%:2»72.ezzis,«V: bhargirzg for H 1-the;5e;»:cEuSive;_ use, of Cireififs, a leased cééfiuir Dr 452"eA'.':c€eCf'ica€ed "Sink including a TV -. _ v'L§p€é:C§":-Ci?CLé'i€, c§a3t'a"«::z%cm't or a telegraph Vc:'m:;z-i_:," * _ " _PmVz,2is:7o'z*: _£i>;,f "¢-'(:25 mcmageznent eerviees waiting, C5252 fofw«a,zfding, calfer iderzizficaiiozs, :f1i"ee+ ,,.,.Z%JCéy Calling, (fail dispiay, 00:55 refum, eail f$;:fz?een, cczlé bfocicing, azgtemazée eaiébacic, €513? Cmswer, voice mail, zmiee menus and V' 315} zizdeo Co:/2fere:2cz?zg,.' Data services transmission including provision of access to wired or wireiess facilities arzé (vi?) (6?) {C} as} services specificaiigg itgfésigrieed .. 1132"
efficient trans;-hr2§_§siori'Qf data;V'::ége5?<_V _§ Cemrmzzzieation E?€'z=g>z}ag;2'?2e jkz<:%ei.m 2&1: -Zpczlqery Eeiegraph' aizzd zefex. §_>::~*€ {fees 720:? 'é2re2:'§:ide sezviee ;)29e:,9ezde5i.
any pe:*s.e.:~iz '-.in'._ ;:>eZgia'z"s:7()%%¥..i_:-':;¥ 3i":,~§i?":€ ;~'ifzjij?§§":'1a{ier: access er zefeefee' $0 in subeeiause 'A 1 " agency or ezgarziecaéiorz in V z"eVZVcaV:"..'::>1M: :'§.Q: "§?%/:({£ldCaS€Z'fig referred to in M '{:"E;§'c?'.iS'8' '(r._?3I3<;,} ofclause (Z 05); and "ahg; person in relazéon Z-::> inéemei €eEe§§F:b'?ie referred to in subeiause {Zzzuj T _ of efause {I O5);
Sevczictrz.-:§5(Z 20) defines telegram as under
f"'S'65(ZeZO) -- "telegraph" has the same "-emedfzing assigned to in Cfiause {Z} of Seeiien 3 z the Indian Teiegmph A02', 2885.
65{§ E Z} Cfefines "telegraph authority"
Se6\5(? F E} ~ "telegraph authority" has :he ??'i€€€.?'Ei?"Z§; $332'/;{:i?"2,€d :0 if in elczuse {6} sf S3 C{)HEpGSi'C€ Contracis, app};/fing {he pfirzcipéss of ds3r:j:i~:1anE intentien of the <:<>::t:*ac:, as laid <i<>vvr: by the C<:>u:': in the BSNL case the <:omra::: in queséiijé %:s»<;;i'i:> saici' of gocsdg and accordingiy thr:§,»"'h--:;1v6 -'_4ievi§:CE"-fie' ta.X/VAT an Sufi amount. 'F<3Ie<3Qm7 C€;?f1::;3z:fié3-.fear transfers are <:<:smp<>si:€ sjale. Tht':3I'€f01"€, as the 3_;~:§id N/:<:i_:_h¢_g§? works contracts nor Caterif1g§'--;(3n.':'r§;¢§; . Q?' thé centract into goods not possible.
Theraforai to ievy tax on th€ sale of"
x?"~¥8.' _ V ft' hgi'-.,_i;3 dispuié {hem S€fViC€ or telecommunication skfrrvicé as such do not find an entry in thréé' Li.s:.t:~:; Th€I'CfO1"€, by virtue of Entry 97 of
--._Sc.hedu1e mad with Article 248 of the "CO'rLstiti1EVi'§:r:fthe Pariiament has the pOV'Jf3F to cinact 21 law in f6;s§::jct Qf sarvécs and kivj; tax on such s€rvi<:€s. As xziiigau service aspc-3:3: is not <-znumerazésd in tbs C<>ncurrent "List or 8:316 List, the Pariiamemt has sxciugive powéjr :0 "make fthfi law ans} :0 imp0s€ tax. The 353326 (25 {ha S232}: is E?
'»\'?>°.<m 7 '#3 mifee H0ze:2e:/Ier, ESSNE, SFEQEE $152? be regpezeezszéafe fer Zesser :::2'oz.z222Ec>cz<i§ er z/z;,3E-::»cz{Z aims: T Caaaeeci by {he asceessezf webséfe Siazzzs {}?'.v'?'.--'?--3é':7_' L' iniemczzioizzzi gaieway or me media.
9. The SZ1.bSC?"ib€'f" :'3_;:fe{g_uires:f' Z¢;;,FE!.V§:'?:; V' camply with the provéséaézzs 53;'?Aiézeg!zz;:Z€5m'V"
Telegraph Act 3885, Z:e2e:E€a:'a Telésggzfapiz»,,53u§es"
and the information' .r__n&(-ie "
under and any a1nena'rr;e?'a:,s of repiaaezneizté made Zhez"ez',<:» fz"o_;?i"i0 2'eirrz,eV_ V OTHER4§3ONDIfZ'iON.'F; _ V V_ Bizzzz¢g3..,foz{:1iez'iq.;a séruitcé w:':z;.z;g: £;:az%gdea7 in the riot?)/§aZ.;ifé'-_;"e}z.e* cycle shall be S2:im.e c?';s b;j;:ne "z,~:zz-mg cgcze 'etc. RIGIIT T9' TION SERVICE fl BSNL 'I"es_eziL*es {he zighz to disconnect {he Service to any cuszozrzer in case there is ' .. evidence of the Customer énzferéziénailg 02' unirzte'mfior'aaZZy using {he Jétemice in a manner wf/zich would adz2erseEg €??:£pCZCZ BSNL 02' BS['v'L's i\i'em;0z"/7<:. C"?
using ffée service orezeig/;:""je7*«.fe approprz'afe pzzrposes.
3. BSNL reserves {L}/see. fighz' is Eierrn/irsgzzfeilée' services in the ezsent eff%%er'z--1ea;;zrse?:--i_off ' issued by BSA/'L:_ in Q'CC€?.?f<§:£"»:vE?,'(.?"e? plans opted by' assign? 'the extent' of usage or any defazz§~tA;:>nL'V'zpggff'z§f'C€5zsz'orr:ers. DfSCLA_tIf§ER A V ' ' _ V V V Z, ail iffeaseflable care in p?'0Ui§f1i}%,G_:':.V its ' 4sé'r{vi_c'és, fbui if is not ' respenVsibZe7'f0;*_if2»ie'rru;9t_ibVié in service due :0 V"*power _f€i;§;u2ies,V4Vequipznez/at zerzczfizzrzcziorzs, or acts o;,*"21df:tfé;Z'c.qZéz:ni:y. _ _ 2; BEN}; ncif responsible for suZ7s<:n'ber's VcGnzpute§*"h{1_zfQZz.:;are and software or areas of Azhefizéemet not under iés co;/12705. BSEVL dees T' "w;imf.'r;zrzi pzrwacy, security; er evffieéency or the' fnferrzei.
BSz'\/Y, is not responsébie for actions {alien by its czasmmers or ozhez/s as (I. resuiz' of its services.
2'? The euszemer sizaff be resp02eezsi§2Ee~-..fi:w:€ "
Ligaf _. . _5;z':2'sj ' ""{%:,\,_, Effii Agezirz in zine <::as;e s:>§ BHOR fNDUSTRIES.£/ED. VS: COLLECTOR OF CENTRAL EXCISE ~ 3 (40; E.L.T 280 (.36.), me Apex C<>Lu*t1h.e1d ' "It c.:ppears to us 3?:-.442: ;'€;:2z:fi3e2*e»._:i*;e:"
Cerzirai Eixczse Aczgcse is s:'_o'c'>e:i at relevant time, in orc2e.zE s':2 be §i'€'.'?5C€s_"&23 '. ' specified in zfge ezezZry...:¥i:evfif'3.§ earzdiéioen was If/zazf as ifs./",'E;_.E4'.Z2E;'C§}€""§f:€2;Z:§vf(2CZL£?"8 gcrods musi Come 'Tinte .e,5<i.:3{e.rz.ee.' __ 'i'}%ese":mLés€ be kfzeugfz. or these ::;:r_:qpe_'.bV£e_V' said in the __ Aeiuai safe in {he m'a2fi<e':._£SA:.:'21é{'figeeessary, ueer in the eapfivve VCO.f1§ZQ'.vF}1})f'Z:VO7Z is not determinative ' 'V "but A:r'2fz'eZeVr3 must be capabie of being fiszfifci in the rnCarkez'f er known in {he 'V _ mrifkei es goods. "
8.3),' am» case of MOTI LAMINATES PVT. LTD VS, CmiLEcToR or CENTRAL EX. AHMEDABAD "-?Téj:?'G«?""%8£3 in 1995 (176) EL?' 241{S.C.], the Apex Court held ' *~ u:':d<::r':~ ~ War in in ?'---»...j \-..;
M4 ?'2*adé?z'o22o:EZy; C? oorzimcf for oarrioige of__._ goods G?" gaassei/zgors is; Egg ro::2C€wags., *~. ;*cziZwr;zys, {zérzuoys cznci' u;€zEerzo5.~;;$A;V:._'" "
Tfzois is associated with oarfiaoo ' zfangibie goods. Sacha ,_C4arzié%9"}iéaé§':v right over the goods ?E'z.g€*..Coisi'4oo:221<22f 'c'2r'z'c'E= does no: eJzj'ecf .%'2fonsfé.zj of ioighzoldsé any goods zzée~:3§r'~../Egg); "
goods. Or; this q_f;o'E»o_gg;,_V_ the Carry cor7*éer3 and have in afhe :rc:o;§fer to the of 5;» "so ozbsorbea' in """ :jj:hea::i?;%:'Eeff;zi«étatio%{"tfzot this method of shouid also be \ carrzoge of goods and _z 2oz_oi-- :f:;.nofié2' of oz right Eo use goods, if ari§«'«.v.. ..... .. v Th' o:"€foro the lcgislaiivc imcr1ti<)n is that tho o>{pro::Vsi<3';:"V<>f '$3116: of goods' in Entry 48 Shouid bear' ~ ;:::_ec:s'e and definite meaning it has in Ezsmg and that tho ii/h:'éL::ing shoujid not bs: Eofé 31:; fluomegto with zho dofinézion "of 53316, in law rcisziiog to 53213:: of ;§e:3<::dss which might be in S: > gsads, defiizsery, etc. 21203565 Carziizzue :0 be defined acteercééng 33::
cailnaicziimzs. Wife dares moi mean :I?zee:z§1~«£F1e'e' camera: ef the eozzeepts remain s:a€ie;l_ uTI"::e-_ courts must ITLGUS with z'E2e..timese_*' B€1'€ezf:§2e .5'C?":{?Z»J?"Z Eegal Fortysixzh Amendment edge-se fiat-Te V g':.;ée--«. Q' = féeenceg for esczampie} E0 ":;s'sume €}'5?_;C€e{.":::"
transaction is a sa_§e"~._and V':?:_er:,V2:o'v: z':;;;>"z;:" S cz.z'oz,md for what CC}Li_.Z'<;%VVu'b€ :h_e geodesg Tee word "g0oc2's;7f_.?:;r2s .fio€:_i§eez;V.e{[ZerecZ by ihe Ferfgwsixth fiagiredient of oz sgzje C02fi'ii}i':£e'e; same 03ef?ni€§eti_. .?'he1;,secQ;_":riferégfiéet in which i7an.nE;s_n Dzznkeéfieey"-hczsvfiséérvitred is wiih evréefifejfenee; to i'he'~d0z?ii?'wz;zi nature test to be
-_appZie:.i"V-fa _d'~__c:'cmposite transaction not " ,__Cl'oz;erecZ 3;66{29-A}. Trcmsactiozls zé}%7i<i'h.q%e r':'3,u:a:z/at sczies are limited to the eZauee'5;«.V«:)f'.Ar'€icZe 366(29~A]. A25 other :.rfézr:scz<:iiorzs wouki have to qualify as ,,,,M\S£21;fES:.:~1UiZhif'5 D718 m,e<:m.:'ng of the Safes of Act. I 9.30for the purpase of Zezxy of . 3::zZes {ax
44. Sf ail Zhe dzfferezzzf icirzds sf cermposite Zrczyzsaciions Zhe cfrafiers of Ehe F921;!» szxfih z':i?7Z€i'2d.??'l€?7.§ chose ihree specific §'%,/"VA purpase afézriicié 369{Z29~z%j[d}. The A' in ieiécamrrzzmicaiian are Zizniiecé Z§'i:€~, handsets szzppfied by fF?;€?~£--'???"'UZ>C€' As far as the SIM <:a7 <§s {EZ'?",4'Ef.::'C'(";'7??,y.::'.'é3?."'§W.'E'C.i§"VV' the issue is Zefz jE:*7'_ cfezér'-m'{r:.a€ianT Z'hé assessing auZh0r:?::'e_g'"';
104: Thérefere frbm' !:h§:'Vi"'3;§A(}:"'C"i'a"E{i§§ fi§SCLlSSiOfi and thé iaw <:iec1ar€;H:;}; Lh;:5"E§i.1pf:>rfi€_VC?Qu§*.:T.V{i7f;@I}o\7»*s that: The Feriyéisixth :i§x:n§€m'drfi€nt*-dastgnot give: a licence, for exampgk, f"r"#'§3r§'S'21«:tior1 is a sale and be the geods. The word z".gc>:o'_d:~i" haltcrcd by the Forty~s:£xth Ame_f1dmxéf1f . of 2: sak: Ccmtmues to have tb§:¢""¢5a;:n€ .dé:finifi<m--;----«By intmducing separaze cazrsgories of 5~";(if;'€§'1"i8'd 'SV.'fii*1A€'S7"', the meaning of the word "goods" was not altééred. T5if2;r2L§a<:ti<>r3s which are mutanz sales are Eimited t{3. ':hé"V c1"a'iL1s6$ of Article 366{29~A}. Apart from CaS€S "f23k§1.14ingVV"un:ier :~:ub~cEaL1:~;e ({3} and H} of ciausge (29%; 0f ' ~§;1"'TZ'i;C§€ 3:66 Emir:/3 is no ozhér S%':1"~JiC{'3 :s:héc%: has been
--7pc~:r::r:izt€d {Q be Si} sspzlizg if fibers is an ézzsirument of