The blog has discussed the Vodafone controversy in some detail, and commented on important extracts from the Bombay High Court’s judgment yesterday. This post discusses parts of the judgment in more detail, and suggests, with respect, that the judgment is incorrect. For the convenience of our readers, the paragraph number in question is indicated in brackets where appropriate. Chandrachud J...
Vodafone’s Petition Dismissed by the Bombay High Court
It appears that the Bombay High Court has dismissed Vodafone’s writ petition challenging the jurisdiction of the Indian income tax authorities. Reports – the Wall Street Journal, ET, Reuters and Indian Express – are sketchy on the precise basis of the decision. We will discuss the implications in detail once a copy of the judgment is available.
The Rangaraj-Madhusoodhanan Conflict and the “Reformulation” of Rangaraj in Para 55 of Messer Holdings
Section 111A of the Companies Act, 1956, is perhaps the most significant unresolved controversy in contemporary Indian corporate law. The blog noted today that a Division Bench of the Bombay High Court (Messer Holdings) has held that a private arrangement between shareholders conferring a right of first refusal is not contrary to s. 111A of the Companies Act. In this post, I offer some thoughts...
Service Tax on Software Upheld
In 2005, the Supreme Court held that the transfer of branded software constitutes a sale and is exigible to sales tax, levied by State Governments under Entry 54, Schedule VII of the Constitution (Tata Consultancy Services v. State of AP). I have argued elsewhere that this decision may, with respect, require reconsideration on the question of whether the typical software transfer accompanied by a...
Unlawful Distribution of Capital: The Question of Intent
Five judges of the United Kingdom Supreme Court are scheduled to hear an exceedingly interesting case on October 5 and 6, 2010, on what the Court of Appeal describes in the impugned judgment as a “short, but quite basic company law point”. The judgment of the Court of Appeal in the case – Progress Property v. Moorgarth Group, [2009] EWCA Civ 629 – is available here, and the point of...
NLSIR: Call for Submissions
I have received the following call for submissions from the National Law School of India Review, which may be of interest to readers. “The National Law School of India Review (NLSIR) is the flagship law journal of the National Law School of India University, Bangalore, India. The NLSIR is a bi-annual, peer-reviewed law journal providing incisive legal scholarship about issues that are at...
Some Thoughts on the Supreme Court’s Daiichi Opinion – The Significance of Paragraph 48
The Supreme Court’s judgment earlier this year on the SEBI Takeover Code is likely to prove extremely influential. A summary of the propositions that emerge from the judgment is available here, and comments on the SAT opinion are available here, and here. Two key issues deserve close scrutiny – the Supreme Court’s analysis of the relationship between Regulation 2(1)(e)(1) and 2(1)(e)(2)(i), and...
“Subject to” Contracts and Agreements “Not Completed”
“The moral of the story is to agree first and start work later.” So observed Lord Clarke recently, in delivering the unanimous judgment of the United Kingdom Supreme Court in RTS Flexible Systems [“RTS”] v. Molkerei Alois Muller Gmbh [“Muller”]. The judgment considers several questions of law that are of significance to long-term commercial contracts, particularly when there is doubt as to...
Fees for Technical Services – Ashapura Minechem
We have discussed at length the controversy last year over taxation of fees for technical services. In brief, the Supreme Court had taken the view in Ishikawajma that s. 9(1)(vii) of the Income Tax Act, 1961 applies only when services by a non-resident are both rendered and utilized in India. This appeared inconsistent with the plain text of the provision, and with a subsequent Explanation...
“Professional Services”
It is often said that the importance of careful analysis of statutory language cannot be overstated, especially in fiscal matters. One will not be surprised to find, therefore, that the term “professional services” has recently engendered an interesting controversy as to its true scope. It arose before the Bombay High Court in Dedicated Health Care Services TPA v. ACIT, where it was argued that...
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