Anushka Sharma Sales Tax Case: Bombay High Court Asks Actor To Approach Appellate Authority Under Maharashtra VAT Act

The Bombay High Court on Thursday disposed of four tax petitions filed by actor Anushka Sharma and asked her to approach the appellate authority under the Maharashtra Value Added Tax Act.

A division bench of Justices Nitin Jamdar and Abhay Ahuja said that there were disputed questions of fact which would require an inquiry. Therefore Sharma should approach the Joint Commissioner Appeals, of the Sales Tax Deapartment.

"After arguments for sometime, the petitioner says she will avail of the alternate remedy provided under the statute. All contentions kept open. Appeal to be filed within two weeks," the bench ordered adding that the department may consider the delay in filing the appeal.

Sharma had filed the tax petition challenging orders of the deputy commissioner of sales tax, Mazgaon, regarding dues from 2012-2016 for assessment under The Maharashtra Value Added Tax Act.

It is Anushka's case that the assessing officer wrongly held that by endorsing products and anchoring she acquired copyrights which are tangible goods, that are sold and transferred. She was liable to pay only 5% tax, she said. She contended that the copyright always remains with the producer or the respective artist as the case may be.

In her plea, she claimed to have acted in several films as well as award functions according to the tri-party agreement with Yashraj Films Pvt Ltd. The assessing officer levied sales tax for endorsements and comparing events. The demand inclusive of interest was Rs. Rs. 1.2 crore and 12.3 Crore for 2012-13 and for 2013-14 it was nearly Rs. 17 crore. Sharma said there was no way to appeal against this unless 10% of the tax was paid.

Significantly the department opposed the pleas on the ground of maintainability as she had an alternate remedy under section 26 of the Maharashtra Value Added Tax Act.

Sharma was the first owner of copyrights created in her artistic performances and therefore liable to pay sales tax for brand endorsements and for comparing award functions, the Sales Tax Department informed the court in an affidavit. 

The department claimed that unlike an employee working for a company, Sharma had earned monies through tri-party contracts with Yashraj Films as her agent, therefore, her petitions in which she assailed tax notices from 2012- 2016 should be dismissed.

"She is providing her services and earning income through contract for services and not through contract of services (Not employed with anybody). Therefore, under Section 17 of the Copyright Act 1957 she is first owner of Copyrights created in her artistic performances," the affidavit read.

Regarding the facts of the case, the department claimed that based on Sharma's Talent Management agreement with Yashraj, the department has concluded that she is a Performer under the Copyrights Act.

Arguments 

However following arguments by Advocate Deepak Bapat and government pleader Jyoti Chavan on Thursday, the bench observed that the tax officer may have given a wider meaning to the words "copyright" and "performer's rights" but in the present case an enquiry may be necessary. 

"It is my case that the order is without jurisdiction. So we need not go into the facts. I don't hold the copyright for the performances for which I am being charged," Bapat argued. 

"You can argue all this in appeal. This will need adjudication of factual aspects," the Judge said in response and disposed of the plea. 

#BombayHighCourt is hearing actor Anushka Sharma's four pleas against tax notices issued under the Maharashtra Value Added Tax Act from 2012-2016. #AnushkaSharma pic.twitter.com/ovYtRmI6tv

— Live Law (@LiveLawIndia) March 30, 2023

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Citation: 2023 LiveLaw (Bom) 170