Mobile battery chargers are independent products and should be taxed separately from cellphones, as established by the Supreme Court in Nokia India Pvt. Ltd. case.

JUDGMENT :

Tarlok Singh Chauhan, J.

This Civil Revision was admitted on 12.10.2023, on the following questions of law:-

A. Whether the Ld. Tribunal has failed to appreciate the entries made in the Schedules of the HP VAT Act, 2005 in respect of goods/articles/commodities/items to be taxed as per the rates prescribed in the Schedules appended to the H.P. VAT Act, 2005.

B. Whether the Ld. Tribunal has wrongly interpreted the contents of the judgment in Nokia India Pvt. Ltd. case bythe Hon'ble Supreme Court and the orders passed by the Authorities below without adhering to the legal proposition settled down by the Hon'ble Supreme Court.

C. Whether the orders of the Ld. Tax Tribunal are perverse and contrary to the provisions laid down in the VAT Act and the law settled by the Hon'ble Supreme Court in Nokia's case.

D. Whether the order of the Ld. Tax Tribunal has wrongly treated the mobile battery charger taxable@5% instead of 13.75% at par with cell phone chargeable @5%.

E. Whether the Ld. Tax Tribunal is justified in passing the impugned order especially when as per entry No. 60(f)(vii) of part-II A of schedule-A of the HP VAT Act., 2005, does not include mobile charger and other accessories.

F. Whether the cell phone charger is an accessory to the cell phone and is not a part of the cell phone. The battery charger cannot be held to be a composite part of the cell phone, but it is an independent product which can be sold separately, without selling the cell phone. The Ld. H.P. Tax Tribunal has miserably failed to appreciate this aspect and wrongly held that the battery charger is a part of the cell phone.

2. Since all these questions are intrinsically interlinked and interconnected, therefore, the same are being considered together and disposed of by common reasoning.

3. This revision petition has been filed against the order dated 09.06.2022 passed by the H.P. Tax Tribunal, Dharamshala (camp at Shimla) whereby the Tribunal allowed the appeal filed by the respondent herein and set-aside the assessment order dated 13.05.2015 for the financial years 2013-14 and 2014-15 passed by the Assessing Authority-cum-Dy.Excise & Taxation Commissioner, Flying Squad, South Zone. Vide assessment order passed under Sections 16 and 60 of the H.P. VAT Act, 2005, the Dy. Excise and Taxation Commissioner had raised differential VAT liability amounting to Rs.24,52,973/- including interest under the H.P.VAT Act on the sale of cellphone chargers sold alongwith cellphone in retail packs, during the period 01.04.2014 to 31.03.2016. A value of Rs.48/- per charger has been adopted by the Assessing Officer and charges in question were assessed at a differential rate of 8.75% as the respondent had already deposited VAT at the rate of 5% which was levied on the cellphone.

4. It is vehemently argued by learned Advocate General that the issue in question is no longer res integra and stands settled by the judgment of the Hon’ble Supreme Court in State of Punjab and others versus Nokia India Ltd. 2014 (16) SCC 410, wherein the Hon’ble Supreme Court has categorically held that the mobile/cellphone charger is an accessory to the cellphone and is not a part of the cellphone. Therefore, the battery charger cannot be held to be composite part of the cellphone but is an independent product which can be sold separately, without selling the cellphone.

5. On the other hand, Ms. Anu Sura, learned counsel for the respondent has relied upon the judgment of Allahabad High Court in M/s Samsung (India) Electronics Pvt. Ltd. vs. Commissioner of Commercial Taxes, 2016 SCC Online All 5982, order dated 20.2.2025 passed by the Hon’ble Supreme Court in SLP No. 34086/2015, titled as M/s Naresh Kumar Gupta vs. The State of Punjab, Division Bench judgment of Karnataka High Court in The State of Karnataka and others versus Intex Technologies India Limited and others, ILR 2023 Karnataka 279 and order of dismissal dated 08.12.2023 in SLP preferred by the State of Karnataka vide SLP diary No. 40320 of