No relief for actor Anushka Sharma; Bombay HC disposes of pleas against sales tax demand

MUMBAI: The Bombay High Court on Thursday refused relief to actor Anushka Sharma and disposed of her petitions challenging orders passed by the state Sales Tax department demanding tax for assessment years between 2012 to 2016 under the Maharashtra Value Added Tax Act.

A division bench of Justices Nitin Jamdar and Abhay Ahuja said the actor had the alternate remedy of filing appeal against the orders under provisions of Maharashtra Value Added Tax (MVAT) Act.

Sharma had filed four petitions challenging four orders passed by the Sales Tax department levying tax for assessment years 2012-13, 2013-14, 2014-15 and 2015-16 under the Act.

"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," the bench said.

The court, while disposing of Sharma's petitions, directed her to file appeal before the Deputy Commissioner of Sales Tax (Appeals) within a period of four weeks.

Under the Act, when a person files appeal, he or she will have to deposit 10 per cent of the tax amount levied by the department.

As per the Sales Tax department, 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.

As she "transferred" this copyright to the producers of such events for a fee, it was akin to a sale, the Sales Tax department contended.

Sharma's contention is 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.

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The court said all the issues raised by Sharma in her petitions can be decided by the appellate authority.

"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," the court said.

The department had sought for the petitions to be dismissed and cost be imposed on Sharma as she had an alternate remedy available under the MVAT Act.

According to Sharma's petitions, during the concerned period she performed in films and at award ceremonies as part of a tri-party agreement with her agent Yashraj Films Pvt Ltd and producers/event organisers.

The assessing officer levied sales tax not on film consideration but on product endorsements and anchoring at award functions, holding that Sharma had transferred her performer's rights, her petitions said.

For Assessment Year 2012-13, the sales tax demand, inclusive of interest, was Rs 1.2 crore on Rs 12.3 crore consideration and for 2013-14, it was Rs 1.6 crore on a consideration of Rs 17 crore.

The sales tax department passed the orders between 2021 and 2022.

Sharma is known for her roles in films like "PK", "Rab Ne Bana Di Jodi", "Sultan" and "Zero", among others.