2010 (11) TMI 14 - SC - Income Tax

Cross Boarder mergers - divestment - taxability in India - jurisdiction of Indian Tax Department - TDS u/s 195 - capital asset u/s 2(14) - Stay - Petitioner asked to deposit Rs. 2,500 crores within 3 weeks and furnish bank guarantee for Rs. 8,500 crores within 8 weeks - interest shall be payble by the losing parties at the rate as fixed by the court

Summary

Issues:
1. Deposit of a specific sum by the petitioner within a stipulated period.
2. Securing the balance amount by providing a Bank Guarantee.
3. Undertakings to be given by the Department and the petitioner.
4. Stay on coercive recovery steps by the Department.
5. Granting leave to amend the Writ Petition and urging additional facts.
6. Fixing a date for final disposal of the petition.
7. Disposal of a related Special Leave Petition.

Analysis:
1. The Supreme Court directed the petitioner to deposit Rs.2,500 crores with the Registry within three weeks and secure the balance of Rs.8,500 crores with a Bank Guarantee from a Nationalised Bank within eight weeks.

2. Both the Department and the petitioner were required to provide undertakings within eight weeks. The Department was restrained from taking coercive steps for recovering the outstanding demand until further orders.

3. The Court allowed amendments to the Writ Petition and the urging of additional facts, granting the Department eight weeks to file a comprehensive reply. The petition was scheduled for final disposal on 24th February, 2011.

4. A Special Leave Petition filed against an earlier order was disposed of in light of the current judgment, ensuring it would not survive. The Court's decision provided clarity on the related matters and actions to be taken by the parties involved.