Bombay High Court: Writ Courts cannot act as Appellate Bodies to correct factual errors
Hindustan Unilever Ltd. (WRIT PETITION NO. 4325 OF 2024)
Facts:
1. HUL acquired the trademark “Horlicks” (India HFD IP) from GSK’s foreign entities under an assignment deed dated April 1, 2020.
2. The payment of Rs. 3045.14 crores was made to Horlicks Ltd., a British company, and remitted by HUL.
3. The Deputy Commissioner of Income Tax issued an order dated August 23, 2024, under Section 201(1) of the Income Tax Act, 1961.
4. This order alleged that HUL failed to comply with Section 195 of the Income Tax Act which mandates the deduction of tax at source (TDS) on payments to non-residents if such payments are taxable in India.
5. The petitioner contended that the case is covered by the decision of the Delhi High Court in the case of CUB PTY Ltd. (formerly known as Foster’s Australia Ltd.) vs. Union of India &Ors.as also the decision of this Court in Mahyco Monsanto Biotech (India) Pvt. Ltd. vs. Union of India & Ors and such acquisition does not involve transfer of a capital asset in India, so as to attract any capital gains and thus, TDS.
6. It is thus submitted by the petitioner, that on the ground of judicial discipline, the impugned order is required to be held to be illegal and accordingly deserves to be quashed and set aside.
Hon Bombay HC held as below:
1. Whether the Delhi High Court judgement would apply in the facts of the present case, and more particularly on examining the different clauses / terms and conditions of the agreement, so as to be considered that the situs fell outside India, are issues which can be effectively gone into by the Appellate Authority, for appropriate findings of fact to be recorded and thereafter the issue being tested on the principles of law as laid down in the different decisions being relied on behalf of the parties.
2. Error of law or fact, in an order passed by any authority whose orders are appealable, are matter which are certainly within the jurisdiction of the appellate authority, which can authoritatively correct any such lacunae, deficiencies or errors in the orders impugned before it and pass appropriate orders, as the law would mandate.
3. Thus, considering the facts of the case, once a substantive statutory remedy is provided and available to the petitioner, it would not be appropriate that the Court exercises its extraordinary jurisdiction under Article 226 of the Constitution and entertain this writ petition.
The copy of the order is as under:
