Mobile chargers remain separately taxable accessories when sold in single-MRP phone packages.

The appellant, a distributor of mobile phones and IT products, challenged assessments for financial years 2012–13, 2013–14 and 2014–15.

The tax authorities treated chargers sold with phones in single-MRP packs as separate accessories taxable at the residual rate, and classified toner and cartridges as unspecified goods rather than computer peripherals or parts and accessories.

The Tribunal upheld those classifications but remanded issues concerning trade discounts, entry-tax set-off, D-IX declarations, interest and demand computation.

The appeals challenged the Tribunal’s findings on the two classification issues and sought further directions concerning the remanded matters.

1. Whether the Tribunal was justified in applying State of Punjab v. Nokia India Pvt. Ltd. to uphold differential tax on chargers sold with cellular phones in a single-MRP composite pack.

2. Whether toner and cartridges fall under Entries 3 and 4 of Part II of Schedule III of the Bihar Value Added Tax Act, 2005, or the residual entry.

3. What effect the Tribunal’s remand of the remaining issues had on the appeals.

The Court applied the Bihar Value Added Tax Act, 2005, including Entries 3 and 4 of Part II of Schedule III (computer systems, peripherals and their parts and accessories), Entry 14 (cellular phones), Entry 97 (“Printing ink excluding toner and cartridge”), and the residual entry.

It relied on State of Punjab v. Nokia India Pvt. Ltd., which held that a mobile charger remains an independent accessory even when packaged with a phone, and on the Patna High Court’s coordinate Bench decision in Samsung India Electronics Pvt. Ltd. v. State of Bihar, which applied that principle under the Bihar Act.

For classification, the Court applied the principle that the wording of the relevant schedule controls and that an express exclusion must be given effect; it also relied on the residual-entry principle discussed in CCE v. Wockhardt Life Sciences Ltd.

The Court further considered the strict-construction principle in Commissioner of Sales Tax, U.P. v. Modi Sugar Mills Ltd.

On chargers, the Court held that the single MRP, asserted exclusive compatibility, warranty conditions and the appellant’s description of the pack did not alter the charger’s character as an independent accessory under Nokia; the coordinate Bench decision in Samsung also bound the Court on the Bihar Act.

The Court therefore rejected the argument that the pack could not be split for tax purposes.

On toner and cartridges, it considered Entries 3 and 4 alongside Entry 97 and concluded that the express exclusion of toner and cartridges from the printing-ink entry, together with their consumable character, supported residual classification.

It distinguished decisions from other High Courts as turning on differently worded schedules, and held that the earlier Patna High Court orders cited by the appellant had not examined the relevant Bihar wording.

The Tribunal’s remand directions on the other issues were considered adequate, so no further ruling on those matters was required at this stage.

It directed the Assessing Authority to reconsider the remanded issues, provide the appellant a reasonable opportunity of hearing, and recompute tax, interest and other liabilities for 2012–13 and 2013–14, issuing a fresh demand notice within three months of receiving the judgment.

It made no observation or direction concerning 2014–15, dismissed both appeals, and made no order as to costs.