Justice O. Chinnappa Reddy, concurring, declared that tax planning may be legitimate within the law, but "colourable devices cannot be part of tax planning", and that dubious methods of avoiding tax should be discouraged. The observation shaped the law on tax avoidance for decades.
2003
Union of India v. Azadi Bachao Andolan
Treaty shopping upheld
The Supreme Court upheld a CBDT circular allowing companies resident in Mauritius to claim the benefits of the India–Mauritius tax treaty, holding that "treaty shopping" is not in itself illegal and that a tax residency certificate from Mauritius was sufficient.
2012
Vodafone International Holdings v. Union of India
Offshore deals and retrospective tax
Vodafone bought a controlling stake in Hutchison Essar's Indian business by acquiring a Cayman Islands company. The Supreme Court held that the offshore share transfer was not taxable in India. Parliament then amended the Income Tax Act retrospectively (2012) to tax such indirect transfers. Vodafone won an international arbitration against India in 2020, and the Taxation Laws (Amendment) Act 2021 withdrew the retrospective demands.
Retrospective amendment in 2012; withdrawn in 2021.
Vodafone won a bilateral investment treaty arbitration in 2020.
Quick check: Which Act withdrew the retrospective tax demands arising from the 2012 amendment?
Direct Tax Vivad se Vishwas Act, 2020
Taxation Laws (Amendment) Act, 2021
Income Tax Act, 1961
Finance Act, 2012
Answer: B.
2016
Jindal Stainless v. State of Haryana
Entry tax and free trade
A nine-judge bench held that non-discriminatory state taxes do not violate the freedom of trade and commerce under Article 301 merely because they burden trade, and upheld state entry taxes, subject to their not discriminating against goods from other states.
2002–2012
Bhatia International (2002) and BALCO (2012)
Where is the seat?
In Bhatia International v. Bulk Trading (2002) the Supreme Court held that Part I of the Arbitration and Conciliation Act 1996 could apply to arbitrations seated outside India, which allowed Indian courts to interfere. In Bharat Aluminium Co. v. Kaiser Aluminium (BALCO, 2012) a five-judge bench overruled Bhatia, holding that Part I applies only to arbitrations seated in India, but applied the ruling prospectively.
BALCO overruled Bhatia International.
Applied prospectively to agreements after 6 September 2012.
Quick check: Which case overruled Bhatia International on the application of Part I of the Arbitration Act to foreign-seated arbitrations?
ONGC v. Saw Pipes (2003)
Vidya Drolia (2020)
BALCO v. Kaiser Aluminium (2012)
Ssangyong (2019)
Answer: C.
40 more entries under this heading
ONGC v. Saw Pipes · Public policy and patent illegality
Ssangyong Engineering v. NHAI · Narrowing court interference
Vidya Drolia v. Durga Trading Corporation · What can be arbitrated?
In re Interplay between Arbitration Agreements and the Stamp Act · Unstamped agreements are enforceable
