Bombay HC upholds the validity of the amendments made to the Finance Act 2015


Bombay HC upholds the validity of the amendments made to the Finance Act 2015

Serum Institute of India Pvt. Ltd. Vs. Union of India (WP No. 3735 of 2021)


  1. An amendment to section 2(24) was been challenged by the applicant via the insertion of sub-clause (xviii) under the Finance Act, 2015, which is concerned with income. The challenge was to incorporate subsidies, grants, waivers, concessions, reimbursements by the Centre or states, or incentives in cash or kind, as “income”.
  1. The petitioner stated that the sub-clause is opposite to the scheme of the income tax act which is to impose the tax on the income. The term income stipulated under clause (24) of Section 2 of the Act read with Section 4 shows that the income is any monetary return. For the capital subsidies, there is no monetary return counted in. Tax shall be levied only on real income.

Hon Bombay HC held as below:

  1. The legislature stands as the most adept body for deliberating fiscal concerns and crafting policies to tackle them.
  1. Whether introducing new liabilities, exempting existing ones, instituting deductions, or subjecting current deductions to fresh regulatory frameworks, the legislature’s authority in framing laws for addressing specific fiscal gaps remains crucial, as inherent in tax statutes.
  1. We have to defer to the legislature’s expertise in matters of economic policy. Those handling economic issues possess specialized knowledge and so minimal interference is called for, unless the legislation’s stance becomes entirely untenable. In this instance, the petitioner’s case didn’t fit this exceptional criterion.
  1. The petition is therefore dismissed.


The copy of the order is as under: