HC puts on hold 6,000 crore ST notice on BSNL

HC puts on hold 6,000 crore ST notice on BSNL

Hearing the petition filed by BSNL, Justice Ashok B Hinchigeri directed the Commercial tax department not to precipitate the matter till further hearing of the petition. The court made an order after considering the undertaking given by the department that it will not precipitate the issue.

The petitioner had challenged the demand notice issued by the Commercial tax department on June 18 asking the BSNL to pay the sales tax from 2001 to 2009, which comes to around Rs. 6,600 crore .

“Through its optical fiber cable (OFC) the BSNL is transmitting voice and data to the customers. The transmission of data and voice to the customers amounts to transportation of goods and it attracts the sale tax,” the Commercial tax department said in its notice.

Soli Sorabjee, former Attorney General of India, appearing for the BSNL argued that the transmission of electronic magnetic signal does not amount to sale of any goods. The transmission of data and voice is considered as service, the customer gets the service of BSNL, through receiving the voice calls and data, Sorabjee argued.

Unconstitutional act

“For providing service, the BSNL is paying service tax, so levying sales tax is illegal and unconstitutional,” said P S Dineshkumar, petitioner’s advocate.

The local VAT officer of Commercial tax department had imposed the sales tax to the petitioner.

The court adjourned the hearing to August 3, 2010.

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