High Court upholds order for Vodafone to deposit Rs. 75 crores, allows appeals

The High Court of Karnataka confirmed the order directing Vodafone South Limited to deposit Rs. 75 crores with the Assessing Officer and provide a Bank Guarantee for the remaining amount within four weeks. The Revenue agreed to refund the deposited amount with interest as per the Income-tax Act. Both parties were allowed to appeal the Tribunal's decision to the High Court and seek interim orders. The Tribunal was instructed to expedite the appeal process within four months. If the Tribunal ruled against Vodafone, the Revenue was prohibited from encashing the Bank Guarantee until the appeal period expires.

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Issues:
Appeal against order of Income Tax Appellate Tribunal directing deposit of Rs. 100 crore by Vodafone South Limited pending hearing of ITA Nos.449-453/2013.

Analysis:
The High Court of Karnataka heard appeals against an order directing Vodafone South Limited to deposit Rs. 100 crore pending the hearing and final disposal of ITA Nos.449-453/2013. The learned single Judge confirmed the Tribunal's order, leading to appeals filed by both the assessee and the Revenue.

During the hearing, both parties agreed to a settlement. The Court ordered Vodafone South Limited to deposit Rs. 75 crores with the Assessing Officer and provide a Bank Guarantee for the remaining amount within four weeks. The Bank Guarantee was to be maintained until the Tribunal's decision and for 120 days after the Tribunal's ruling as per Section 260A of the Income-tax Act, 1961.

The Revenue agreed to refund the deposited Rs. 75 crore with interest as per Section 244A of the Act within a week after the appeal period under Section 260A expires. The parties were allowed to appeal the Tribunal's decision to the High Court and seek interim orders. The Tribunal was instructed to decide on the appeals (ITA Nos.449-453/2013) on merits without influence from the single Judge's observations in the writ petitions.

The Tribunal was directed to expedite the appeal process, preferably within four months from the date of deposit and Bank Guarantee submission. If the Tribunal ruled against Vodafone, the Revenue was prohibited from encashing the Bank Guarantee until the appeal period under Section 260A expires. All contentions of the parties were left open by the Court, and the appeals were disposed of with these instructions.

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