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VVF (India) Limited v. The State of Maharashtra

Civil Appeal · 2021 INSC 818Decided 3 Dec 2021
Civil Appeal No. 7387 of 2021
Dr. Justice D.Y. Chandrachud · Justice A.S. Bopanna

Background

The appellant company had, before any tax assessment was finalized, paid over Rs 3.64 crore "under protest" toward a disputed tax demand. After the final assessment raised a much larger demand, a new law required a mandatory 10% pre-deposit before an appeal against the assessment could be filed. Tax authorities refused to count the earlier protest payment toward this pre-deposit, and the Bombay High Court upheld that refusal, so the company's appeal was rejected for want of proper pre-deposit.

Decision Breakdown

The Supreme Court allowed the company's appeal, holding that the plain and grammatical meaning of the statute did not exclude amounts already paid under protest from counting toward the mandatory pre-deposit. It held that both the assessing authority and the High Court had read restrictions into the provision that the statute's actual text did not support: tax statutes must be interpreted strictly as written, not by inference about what the legislature "intended." The Court set aside the High Court's judgment and restored the company's appeal to the appellate tax authority, subject to verifying that 10% of the disputed tax had indeed already been paid.

Lesson Learnt

Money already paid under protest before a final tax assessment is not necessarily lost for later appeal purposes: it can count toward a mandatory pre-deposit, and tax provisions must be read exactly as worded, not expanded against a taxpayer by assumption.

Official source (sci.gov.in)View Judgment (PDF)

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