Big blow to Anushka Sharma in tax case, read details inside

The Bombay High Court on Thursday disposed of Anushka Sharma's petition challenging orders passed by the Maharashtra Sales Tax Department and refused to grant any relief to the actor. “After hearing the petitions for some time, the petitioner's lawyer informed that he would avail the remedy of appeal. All contentions of the petitioner are kept open in the appeal. The petitioner is granted 4 weeks' time to file an appeal,” the court said.

The actor has filed four petitions challenging the Maharastra Sales Tax department's orders raising dues for 2012-13, 2013-14, 2014-15 and 2015-16 assessment years under the Maharashtra Value Added Tax (MVAT) Act levying sales tax. "Why should we entertain the petitions when the petitioner (Sharma) has a full-fledged remedy of appeal available under the Act? The statutory provision is available," the bench said.

The court has now directed Sharma to file an appeal before the Deputy Commissioner of Sales Tax (Appeals) within a period of four weeks. Under the Act, when a person files an appeal, he or she will have to deposit 10 per cent of the tax amount levied by the department.

The Sales Tax Department's claim is that Anushka was the "first owner of copyrights" on her performances at awards functions or stage shows, and therefore liable to pay sales tax when she received income from them. As she 'transferred' this copyright to the producers of such events for a fee, it was akin to a sale, the department said.

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Sharma's argument is that an actor who performs in a film, advertisement or a stage/TV show can not be called a creator or producer, and hence she or he does not own a copyright on the same. Advocate Deepak Bapat, appearing for Sharma, argued that the assessing officer (AO) had wrongly levied sales tax on the consideration she received for endorsements and anchoring at award functions. 

He argued that the sales tax officer had erroneously held that through endorsements and anchoring award functions, Anushka had earned copyright, which is goods of intangible nature and sold or transferred them.

"The authority will go into all the issues and conduct a detailed inquiry. If we sit to decide this, then every MVAT Act matter will come here," the court said.