Bombay High Court Asks Actress Anushka Sharma to Approach Appellate Authority under Maharashtra VAT Act

Bombay High Court Asks Actress Anushka Sharma to Approach Appellate Authority under Maharashtra VAT Act

The Bombay High Court by its coram comprising of Justices Nitin Jamdar and Abhay Ahuja disposed of four tax petitions filed by the actress Anushka Sharma and asked her to approach the appellate authority under the Maharashtra Value Added Tax Act.

In the present case, the actress had filed tax petitions challenging orders of the deputy commissioner of sales tax, Mazgaon, regarding dues from 2012-13 and 2013-14 for assessment under The Maharashtra Value Added Tax Act.

According to her plea, the assessing officer had wrongly held that by endorsing products and anchoring she acquired copyrights which are tangible goods, that are sold and transferred. She was liable to pay only 5% tax, she said. It was further contended that the copyright always remains with the producer or the respective artist as the case may be.

It was further claimed that, since she has acted in several films as well as award functions according to the tri-party agreement with Yashraj Films Pvt Ltd. The assessing officer levied sales tax for endorsements and comparing events. The demand inclusive of interest was Rs. Rs. 1.2 crore and 12.3 Crore for 2012-13 and for 2013-14 it was nearly Rs. 17 crore. Sharma said there was no way to appeal against this unless 10% of the tax was paid.

Per contra, the Joint Commissioner of Sales Tax, the department contended since there are provisions for appeal and revision under the Act Sharma could not have directly approached the High Court. The Act in fact had a provision for a second appeal before the Maharashtra Sales Tax Tribunal.

The department asserted that based on Sharma's Talent Management agreement with Yashraj, the department has concluded that she is a performer under the Copyrights Act.

The department vehemently avowed that through Sharma’s YRF Talent Management agreement, she entered into tripartite agreements with various companies such as Nivea India Pvt. Ltd. Gitanjali Gems, Gitanjali Lifestyle, Cannon India, Semora Entertainment Works, Oranjuice Entertainment etc.

On pursual of the terms of her agreement, it was revealed that she receives consideration for her artistic performance from the client company which is then used by the client company for commercial purposes like advertisement, entertainment. At this time, the Copyright involved in her performance is also get transferred to client company, the department said. Such transfers are covered under definition of Sale 2(24) of the MVAT Act.

Thus, Anushka Sharma is an artist entitled to Copyright in her every work of artistic performance.

However, following arguments by Advocate Deepak Bapat appearing for the actress and government pleader Jyoti Chavan, the bench observed that the tax officer may have given a wider meaning to the words ‘copyright’ and ‘performer's rights’ but in the present case an enquiry was necessary.

Advocate Deepak Bapat argued, “it is my case that the order is without jurisdiction. So, we need not go into the facts. I do not hold the copyright for the performances for which I am being charged.”

“You can argue all this in appeal. This will need adjudication of factual aspects,” the bench said in response.

“After arguments for some time, the petitioner says she will avail of the alternate remedy provided under the statute. All contentions kept open. Appeal to be filed within two weeks,” the bench ordered adding that the department may consider the delay in filing the appeal while disposing of the plea.