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Informist, Thursday, Dec. 19, 2024

 

--Delhi HC junks tax dept's INR 1.76-bln demand against Pawan Hans

 

By Surya Tripathi 

 

NEW DELHI – The Delhi High Court on Thursday quashed Commissioner of Trade and Taxes' demand of INR 1.76 bln against Pawan Hans Ltd. for the period 2006 to 2010. The bench of Justice Vibhu Bakhru and Justice Amit Mahajan said that the appeal by Pawan Hans is allowed and the Appellate Tribunal, Value Added Tax, Delhi's order to uphold tax demand is set aside. 

 

Pawan Hans had said that it was in the business of chartering helicopters and had entered into agreements with various state governments and public sector entities that hired its helicopters. According to the Value Added Tax authorities, the agreements entail transfer of the right to use and therefore, the consideration would be taxable under the Delhi Value Added Tax Act, 2004. 

 

Advocate Tarun Gulati, appearing for Pawan Hans, had said that the helicopters continued to be in possession and control of the petitioner. The pilots manning the said aircraft are under rolls of the petitioner, said Gulati, adding that the maintenance of the helicopters is also done by Pawan Hans.

 

Pawan Hans was registered with the service tax authority for rendering the service of "Supply of Tangible Goods for Use Services", said Gulati, adding that they have duly paid the Service Tax as chargeable under the Finance Act, 1994. Gulati said the appellate tribunal's order is "palpably erroneous". Notwithstanding the same, if it is held that there has been a transfer of right to use the aircraft, Pawan Hans would not be liable to pay any service tax as both the taxes are mutually exclusive, said Gulati.

 

Last year, the high court had issued a notice to the tax department and asked it not to take any coercive steps for recovery of the demand. Further, the high court had said that the issue in the case was if as per the agreement, "hiring of helicopters" comes under the meaning of "Sale" under Section 2(g)(iv) of The Central Sales Tax Act, 1956. A detailed order in the case is awaited.  End

 

Edited by Deepshikha Bhardwaj

 

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