Mumbai: No relief for Anushka Sharma as HC asks her to approach appellate authority; actor liable to ₹2.8 Cr sales tax

Mumbai: Bollywood actor Anushka Sharma failed to get relief from the Bombay High Court on Thursday which disposed of her four petitions challenging orders passed by state Sales Tax department demanding sales tax for assessment years between 2012 to 2016. 

A bench of Justices Nitin Jamdar and Abhay Ahuja disposed of Sharma’s petitions saying that the actor has the alternate remedy of filing appeal against the orders under provisions of Maharashtra Value Added Tax (MVAT) Act. The court has directed her to file an appeal before the Deputy Commissioner of Sales Tax (Appeals) within a period of four weeks.

Anushka Sharma filed 4 separate petitions

The actor had filed separate petitions challenging four orders passed by the Deputy Commissioner of Sales Tax, demanding tax for assessment years between 2012 to 2016 under the MVAT Act. The court questioned: “Why should we entertain the petitions when the petitioner (Sharma) has a full fledged remedy of appeal available under the Act? Statutory provision is available.” 

Sharma had approached the HC contending that under the provisions of the MVAT Act, when a person files an appeal, s/he has to deposit 10 per cent of the tax amount levied by the department. An actor, who performs in a film, advertisement or a stage/TV show cannot be called a creator or producer, and, hence, she or he does not own a copyright on the same, the actor had claimed.

Transfer of copyrights akins to sales

The sales tax department contended that Sharma was the first owner of copyrights on her performances at awards functions or stage shows, and, therefore, liable to pay sales tax when she received income from them. Since she transfers this copyright to the producers of such events for a fee, it was akin to a sale, the Department had said in its affidavit filed on Wednesday. 

The department sought for the petitions to be dismissed and cost be imposed on Sharma as she had an alternate remedy available under the MVAT Act. However, the court expressed that the issues raised by Sharma can be decided by the appellate authority as per the provisions of the MVAT Act. 

Total interest: 2.8 Cr

The bench noted: “The authority will go into all the issues and conduct a detailed inquiry. If we sit to decide this, then every MVAT Act matter will come here.” According to the plea, for assessment year 2012-13, the sales tax demand, inclusive of interest, was ₹1.2 crore on ₹12.3 crore consideration and for 2013-14, it was ₹1.6 crore on a consideration of ₹17 crore. The sales tax department passed the orders between 2021 and 2022.