#retrospective taxation

Karnataka High Court ruled that the 2010 Finance Act amendment to Section 9(1)(vii) of the Income-Tax Act applies only prospectively, preserving the Supreme Court’s territorial-nexus principle. Consequently, taxpayers providing offshore technical services can claim refunds for taxes previously demanded.

Supreme Court rules that while retrospective withdrawal of tax exemptions is constitutionally valid, imposing penalties or interest for periods before the amendment violates fairness. The judgment protects dealers from retroactive financial burdens, setting a precedent for tax reassessment proceedings under the Karnataka Sales Tax Act.

CESTAT Bangalore rules that reimbursable expenses cannot be included in taxable value for service tax before 2015 amendment to Section 67 of Finance Act, 1994, relying on Supreme Court precedent.

The Bombay High Court struck down the Union's retrospective imposition of a one-time spectrum charge on telecom operators for spectrum held above 6.2 MHz since 2008, ruling that neither the Telegraph Act nor license agreements empowered such a levy. This decision reinforces contractual certainty in telecom licensing and curbs executive overreach disguised as revenue recovery, protecting operators from arbitrary fiscal demands.

CESTAT Chennai rules that service tax recipients who filed returns under Section 71A within the extended period cannot be subjected to Section 73 demands, even for retrospective periods. The tribunal also denied interest, reinforcing procedural compliance over substantive liability in tax disputes.

ITAT Hyderabad rules that Section 12AB(4) of the Income Tax Act cannot be applied retrospectively to cancel charitable registration for prior assessment years. The tribunal emphasized judicial discipline, holding that lower authorities must follow higher judicial decisions even if they disagree, and cannot revisit settled issues without explicit legislative intent.