The Supreme Court on Monday asked the telecom majors Bharti Airtel and Hathway and Datacom Pvt Ltd to move appropriate authority to decide whether transactions related to providing broadband services to subscribers can be treated as “sale of light energy” for levying sales tax. A bench headed by Justice Mr S H Kapadia while setting aside the Karnataka High Court order asked the companies to move the first appellate authority (the Commissioner of Commercial Taxes (Appeals) within two weeks to decide ”…whether broadband services which transfer data are accessible to tax”.

“In our view, the single-judge (High Court) was right in directing Bharti Airtel to exhaust the alternate remedy… The first appellate authority will decide the issue expeditiously within three months. The authority will decide the matter on merits and without being influenced by the High Court order or observations,” the bench said. Justice Mr Kapadia said, **It appears that a substantial amount of tax has been deposited. And the authority shall not insist on further deposit of taxes till the final disposal of the matter. We further direct, the assesses shall file returns inn accordance with law without any prejudice to the outcome of the matter.” Airtel and Hathway had sought the apex court’s directions in deciding whether the sale of light ener gy to the customer while transferring data and voice from one point to another was liable to sales tax.

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