- It is to be noted that in its 2005 ruling the Supreme Court ruled that it was illegal to levy Luxury tax on cigarrets.
Hyderabad: The Telangana High Court has junked a petition by the ITC against the state government demand to remit collecting luxury tax on cigarettes.
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A bench of Chief Justice Ujjal Bhuyan and Justice S Nanda, however, left it to the commercial tax authorities in Visakhapatnam and Warangal to take a call on the matter. It is to be noted that in its 2005 ruling the Supreme Court ruled that it was illegal to levy a luxury tax on cigarettes.
Following the Supreme Court ruling, the tax collected by the ITC in the previous five years became a bone of contention. The company claimed that it did not collect the luxury tax. However, the Telangana Income Tax officials claimed that the company collected tax despite it being declared illegal.
In Andhra Pradesh the tax officials served a notice to ITC asking it to pay Rs 63 crore illegally collected as a luxury tax. The bench further said that it would not entertain petitions from the ITC any further since the matter was outside its jurisdiction.
The Telangana high court further asked the ITC Visakhapatnam to approach an appropriate forum.
