A Division Bench of the Supreme Court today declared that the User Development Fee [“UDF”] charged by the private operators of the Mumbai and Delhi airports is ultra vires. The judgment, reported as Consumer Online Foundation v Union of India, contains several observations that are crucial in ascertaining the proper scope of the public-private model [“PP”] in the aviation sector. This post set...
Territorial Nexus Revisited: GVK Industries v. Union of India
We have previously discussed issues surrounding the application of the “territorial nexus” doctrine to income tax law in several posts (here, here, here and here). In its recent decision in GVK Industries v. Union of India, a Constitution Bench of the Supreme Court has confirmed that the doctrine applies to Parliamentary laws. The precise question of the constitutionality of Section 9(1)(vii) of...
A Level Playing Field and Public Interest
One of the striking features of the Indian economy post-1991 is the conception it has of a level playing field as between Government and private enterprises. It should be noted that this cuts both ways, for while there are commercial advantages for certain Government entities, others are required as part of Government policy to bear losses that a private enterprise in that position would choose...
Constitutional Challenge to IPAB and Copyright Board
Spicy IP reports that two writ petitions have been admitted by the Madras High Court challenging the constitutionality of the Intellectual Property Appellate Board (IPAB) [Shamnad Basheer v. Union of India] and the Copyright Board [SIMCA v. Union of India]. The challenge is based on separation of powers grounds; and if one were to apply the principles laid down by the Supreme Court in the NCLT...
The Taxation of Sales Preceding Export Transactions – Part II
In the first part, I outlined the conflict between the ‘same goods’ and ‘inextricable connection’ test, witness in applying section 5(3) of the Central Sales Tax Act. The resolution of this conflict, mandated a reference to a Constitution Bench in Azad Coach Builders. On facts, the seller (Azad Coach Builders) has sold bus bodies to the exporter (TELCO), which were mounted on chassis made by the...
The Taxation of Sales Preceding Export Transactions – Part I
Last week, the Supreme Court decided an interesting issue relating to statutory interpretation, very similar to the issue which had arisen in Daga Capital, discussed earlier. The question which the Court in State of Karnataka v. Azad Coach Builders was the extent to which States may tax sales transactions which immediately precede an export/import transaction. The controversy arises because the...
Insurance policies and the tax/fee distinction
Recently, the Bombay High Court had occasion to consider an important issue regarding the transferability of life insurance policies, and the restrictions that the LIC has the powers to place on such transferability. The background to the facts of this case is provided by another decision of the Bombay High Court in Insure Policy Plus Services v. LIC, decided in 2007. The petitioners in this case...
Further Comments on the NCLT judgment
In an earlier post, I had noted that a Constitution Bench of the Supreme Court has upheld the establishment of the National Company Law Tribunal and the National Company Law Appellate Tribunal, in an appeal filed by the Union of India against a judgment of the Madras High Court. The judgment of the Constitution Bench (Union of India v. R. Gandhi / Madras Bar Association) is...
Supreme Court upholds NCLT
The Business Standard reports that the Supreme Court of India has upheld the validity of the National Company Law Tribunal. A Constitution Bench of the Court delivered the judgment more than a year after hearing arguments on an appeal filed against a decision of the Madras High Court in R. Gandhi v. Union of India. In an earlier post, I had...
The Supreme Court’s Judgment in the Reliance Dispute – Part I
The Supreme Court’s judgment today in Reliance Natural Resources Ltd. [“RNRL”] v. Reliance Industries Ltd. [“RIL”] turns on several important propositions of corporate and contract law. It has been widely reported that RIL prevailed by a majority of 2:1. This is incorrect, for Justice Sudershan Reddy’s separate opinion concurred with the majority on all but one issue, on which he decided in...
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