M/s. Samsung (India) Electronics Pvt. Ltd. Vs. Commissioner of Commercial Taxes (Allahabad High Court)
Admittedly, the mobile phone and charger are sold as part of a composite package. The primary intent of the contract appears to be the sale of the mobile phone and the supply of the charger at best collateral or connected to the sale of the mobile phone. The predominant and paramount intent of the transaction must be recognised to be the sale of the mobile phone. In the case of transactions of the commodity in question, the Court must also bear in mind that a charger can possibly be purchased separately also. However in case it is placed in a single retail package along with the mobile phone, the primary intent is the purchase of the mobile phone. The supply of the charger is clearly only incidental. In any view of the matter, there does not appear to be any separate or distinct intent to sell the charger. Regard must also be had to the fact that the Court is considering the case of a composite package, which bears a singular MRP. The charger is admittedly neither classified nor priced separately on the package. It is also not invoiced separately. The MRP is of the composite package. The respondents therefore cannot be permitted to split the value of the commodities contained therein and tax them separately. This especially when one bears in mind that entry 28 itself correlates the article to the MRP.
FULL TEXT OF THE HIGH COURT JUDGMENT / ORDER IS AS FOLLOWS:-
Heard Shri Tarun Gulati, learned counsel assisted by Shri Shashi Mathew and Nishant Misha for the revisionist and Shri A.C. Tripathi, learned standing counsel for the respondent.
The seminal issue which arises in this batch of revisions is whether a mobile charger when sold as part of a composite package comprising the said article as well as a mobile phone is liable to be taxed separately treating it to be an unclassified item under the provisions of the U.P. VAT Act 20081. The issue itself has arisen consequent to the Department taking the position that the charger is liable to be taxed separately in light of the decision rendered by the Supreme Court in State of Punjab Vs. Nokia India Pvt Ltd2. The principal questions of law as framed and upon which the rival submissions centered read thus:
“A. Whether the Tribunal ought to have held that the entire composite set having a mobile phone and mobile charger having a single MRP was liable to assessed to a single classification under Entry No. 28 of Schedule-II, Part B of the Act?
B. Whether the Tribunal erred in applying the judgment dated 17.12.2014 by the Honorable Supreme Court in the case of State of Punjab V. Nokia Private Limited to the Applicant’s facts and circumstances and in view of the fact that Entry No.28 of Schedule-II, Part-B of the Act reads differently from the entry considered by the Honorable Supreme Court?”
The position in the different revisions would be evidenced from the following:
