Viacom 18 Media Pvt. Ltd. Vs State of Maharashtra and ors. (Bombay High Court)
The Bombay High Court has set aside an order passed by a Joint Commissioner of Sales Tax (Appeals) concerning the taxability of distribution income and subscription charges collected by Viacom 18 Media Pvt. Ltd. The court ruled that the appellate authority was bound by an earlier order passed by a Deputy Commissioner of Sales Tax (Appeals) which had held that similar transactions were not subject to sales tax.
The dispute involves Viacom 18 Media Pvt. Ltd., a company engaged in broadcasting and distributing television channels. The core issue was whether the income earned from distributing these channels and the subscription charges collected from sub-distributors were taxable under the Maharashtra Value Added Tax Act, 2002 (MVAT Act).
The case began when the Assessing Officer, in an assessment order dated October 5, 2015, included the petitioner’s distribution income in the turnover and subjected it to tax under the MVAT Act and the Central Sales Tax Act (CST Act).
Viacom 18 challenged this assessment order before the Joint Commissioner of Sales Tax (Appeals), the first appellate authority. Before the Joint Commissioner, the company argued that the issue of taxability of such income had already been decided in their favour in an earlier proceeding. They presented an order dated February 27, 2007 (referred to with slightly varying dates in the High Court judgment text, but consistently pointing to the same earlier order) passed by a Deputy Commissioner of Sales Tax (Appeals). In that previous order, concerning similar circumstances, the Deputy Commissioner had accepted the company’s contention that the transaction in question did not attract sales tax under the Bombay Sales Tax Act, 1959 (BST Act), the predecessor to the MVAT Act.
