HC asks BSNL to work out tax deposit

HC asks BSNL to work out tax deposit

Bangalore, Aug 9, DHNS:

The Karnataka High Court on Monday directed the Bharat Sanchar Nigam Limited (BSNL) to come out with an amount which it can deposit with the Commercial Tax Department for extension of the interim order on levy of sales tax.

The BSNL has challenged the demand notice issued by the Commercial Tax Department for payment of Rs 6,600 crore as sales tax for the period from 2001 to 2009. The transmission of voice and data over the optical fibre cable to the customers amounts to transportation of goods and hence attracts sales tax, the Department said in the notice. The court had stayed the demand notice earlier, the term of which expired on Monday. Appearing for BSNL, former attorney general of India, Soli Sorabjee submitted the order passed by the Commercial Tax Department was biased as the matter was discussed before the subordinate legislation committee. He contended that the order has been made on the basis of the report of the committee headed by legislator N Yogish Bhat. Senior counsel Raghavan argued that the transmission of data through a optical cable, required energy in the form of Artificially Created Light Energy (ACLE). Since the sale of ACLE is sale of goods, it attracts sales tax, he contended. Justice Ashok B Hinchigeri directed both parties to work out the amount that the BSNL can deposit for extension of the stay order.