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Informist, Wednesday, Nov. 12, 2025

 

NEW DELHI – The Delhi High Court has set aside a notice by the income tax department notice to start reassessment proceedings against Vedanta Ltd. over alleged wrongful availment of input tax credit of INR 4.24 billion, , for assessment year 2019-20, without actual receipt of goods at the declared place of business of the company. 

 

The high court noted that in July, the Additional Commissioner, Goods and Services Tax and Central Excise, Madurai, had closed the main issue in respect of availment of input tax credit. "Accordingly, the impugned order is set aside. The matter is remanded for being considered afresh, after bearing in mind the GST order dated 11th July 2025 (Jul. 11, 2025)," the court said. 

 

Vedanta may place the GST order before the Assistant Commissioner of Income Tax, along with a short note of submissions which it relies upon. Let the order under Section 148A(3) of the Income Tax Act, 1961 be passed by the tax department within a period of three months, said the court.

 

The case has its genesis from Vedanta entering into a transaction for the sale of copper concentrate during the period when its copper plant at Tuticorin was shut due to environmental concerns. The transaction was entered into through four agreements with Xango Trading (India) Pvt. Ltd., for sale and repurchase of approximately 55,000 tonnes of copper.

 

The sale of copper concentrate through six invoices was recorded in the books of accounts of Vedanta. The copper plant was then directed to be restored for operation in 2018 through an order of the National Green Tribunal, pursuant to which Vedanta repurchased the copper concentrate. In respect of this transaction the allegation is that income tax credit of more than INR 300 million has been wrongfully availed by Xango Trading (India).

 

Consequently, summons were issued to Xango Trading (India) and to Vedanta Ltd, pursuant to which an investigation report was prepared by Directorate General of GST Intelligence, Coimbatore Zonal Unit. According to the income tax department, there was a bogus income tax credit amounting to more than INR 4.24 billion which was availed by Vedanta.

 

At 1131 IST, shares of Vedanta were down 0.5% at INR 520.90 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Vandana Hingorani

 

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