The Karnataka High Court on Monday directed the commissioner of commercial taxes not to precipitate the matter on the collection of Rs 6,600 crore as sales tax from Bharat Sanchar Nigam Limited (BSNL) for selling voice and data to customers.
Hearing a petition filed by BSNL, Justice Ashok B Hinchigeri directed the commercial taxes department not to precipitate the matter till further hearing of the petition. The court gave the order after considering the undertaking given by the department.
The petitioner had challenged the notice issued by the commercial taxes department on June 18, asking BSNL to pay the sales tax from 2001 to 2009, amounting to Rs 6,600 crore.
Through its optical fiber cable (OFC) network, BSNL is transmitting voice and data to customers. This amounts to transportation of goods. So, it attracts sales tax, the department said in the notice.
However, Soli Sorabjee, former Attorney General of India, argued that the transmission of electromagnetic signals did not amount to sale of any goods. This is a service and customers get this service by receiving voice calls and data, Sorabjee argued.
For providing the services, BSNL is paying service tax. So levying sales tax is unconstitutional, said P S Dineshkumar, the petitioners advocate.
In an earlier instance, Bharati Airtel had challenged the same sales tax levied on it by the department, in the High Court. The High Court had upheld the order of the commercial taxes department. Later, the Supreme Court had dismissed the SLP of Airtel and remanded the petition back to the tax tribunal. The court has adjourned the hearing to August 3.
HC refuses to hear PIL on Bharat bandh
The High Court has refused to hear the PIL seeking a direction that holding Bharat bandh on July 5 was illegal.
A Manju, Congress MLA from Arakalgud, filed a PIL, challenging the holding of Bharat bandh to oppose the hike in fuel prices.
A division bench headed by Justice N K Patil observed that the bandh was called by all political parties. But the petitioner mentioned only the BJPs name. The bandh was called against the Congress government. Incidentally, the petitioner belongs to the Congress, the court observed. So, the petitioner has no right to seek remedy. It asked the petitioners advocate to file a fresh petition.