In this landmark judgment, the Supreme Court upheld the constitutional validity of the Expenditure-tax Act, 1987, a pivotal case in Indian taxation law. The Court decisively ruled that the Act, imposing a 10% tax on expenditure in high-end hotels (room charges ≥ Rs. 400/day), is within the Union’s legislative competence under residuary powers, not a State-level luxury tax. It affirmed the classification as rational under Article 14, targeting ostentatious consumption without arbitrariness, and dismissed claims of unreasonable restrictions on business under Article 19(1)(g). This judgment reinforces the Union’s authority to enact innovative fiscal measures for economic regulation, setting a precedent for interpreting residuary powers and expenditure-based taxes in India’s federal structure.

In a landmark ruling on procedural compliance in wealth tax appeals, the Supreme Court of India, in Maharaja Amrinder Singh vs. Commissioner of Wealth Tax, underscored the mandatory nature of formulating substantial questions of law under Section 27-A of the Wealth Tax Act, 1957. The Court, drawing a direct parallel to Section 100 of the Code of Civil Procedure, 1908, established that the High Court’s jurisdiction to entertain an appeal under Section 27-A is contingent upon the identification and formulation of a substantial question of law. The judgment reinforces that this step is not a mere formality but a jurisdictional prerequisite, as settled in Santosh Hazari. By setting aside the High Court’s orders for failing to comply with this requirement, the Supreme Court has remanded the matter for fresh consideration, emphasizing strict adherence to statutory appeal procedures. This decision serves as a critical precedent for tax authorities, practitioners, and appellate courts, clarifying that the procedural framework for appeals under the Wealth Tax Act is coextensive with that for civil second appeals, ensuring uniformity and legal rigor in tax litigation.

In this landmark Supreme Court judgment, the Court struck down discriminatory provisions in Section 10(26AAA) of the Income Tax Act 1961. The case centered on tax exemptions for ‘Sikkimese’ individuals, which excluded Indians who settled in Sikkim before its 1975 merger and Sikkimese women marrying non-Sikkimese after 2008. The Court, led by Justice M.R. Shah, held that these exclusions violated constitutional guarantees of equality and non-discrimination under Articles 14, 15, and 21. By delving into Sikkim’s historical and legislative context, the Court reasoned that the classifications lacked a rational basis and perpetuated arbitrary distinctions among similarly situated citizens. This decision reinforces the principle that tax laws must align with constitutional mandates, ensuring fairness and inclusivity, particularly in special status regions like Sikkim.

In a landmark ruling on retrospective tax amendments, the Supreme Court dismissed the Revenue’s appeal, upholding that additional tax under s. 143(1A) cannot be levied on income omitted from a return due to a subsequent retrospective change in law. The Court affirmed that the correctness of a return is determined as of the filing date, and penal consequences cannot ensue from legislative changes unknown to the assessee at that time. This judgment reinforces the principle of fairness in tax administration, protecting assessees from being penalized for acts lawful when performed.

In a landmark ruling on block assessment taxation, the Supreme Court overturned the High Court’s decision and held that surcharge is leviable on undisclosed income for searches conducted before 1st June 2002. The Court clarified that the proviso to section 113, inserted by Finance Act 2002, is merely clarificatory, affirming that surcharge under the Finance Act of the search initiation year applies retrospectively. This decision reinforces that surcharge is a constitutional levy distinct from income-tax, applicable to block assessments under Chapter XIV-B, ensuring consistency in tax enforcement for search cases.

In this landmark judgment, the Supreme Court of India, through Justice Arijit Pasayat, clarifies the nuanced application of the doctrine of prospective overruling and the retrospective effect of review judgments. The case arose from a recruitment dispute where the Karnataka High Court upheld an appointment made under a legal precedent that was subsequently overruled by the Supreme Court in a review petition. The Supreme Court authoritatively holds that the doctrine of prospective overruling is not automatic and must be explicitly invoked by the Court. Crucially, it establishes that a judgment delivered on a review petition, which overrules a prior decision, operates retrospectively, effectively nullifying the earlier decision ab initio. This principle ensures legal certainty and consistency, preventing lower courts from validating actions based on overruled jurisprudence. The Court’s reasoning reinforces the supremacy of the Supreme Court’s declaratory power under Article 141 of the Constitution, affirming that its pronouncements represent the law as it always should have been, unless specifically decreed otherwise.

In a landmark ruling, the Supreme Court upheld the constitutional validity of clause (f) of Section 43B of the Income Tax Act, 1961, which mandates that deduction for leave encashment liability is allowable only upon actual payment. The Court reversed the Calcutta High Court’s decision that had struck down the clause as arbitrary. The judgment reinforces the legislature’s prerogative to enact tax disincentives to curb potential abuses, such as claiming deductions without actual disbursement. It clarifies that Section 43B operates as an exception to the general mercantile accounting system, imposing a condition of actual payment for specified deductions. This decision provides certainty to taxpayers and the Revenue, affirming that fiscal legislation enjoys a presumption of constitutionality and broad latitude in classification.

In a landmark ruling on religious trust exemptions, the Supreme Court allowed Radhasoami Satsang’s appeal, holding its income exempt under sections 11 and 12 of the Income Tax Act, 1961. The Court emphasized that properties were held under a legal obligation for religious purposes, despite the trust’s revocable nature, as revocation would not benefit the Satguru personally. Critically, the Court applied the doctrine of consistency, ruling that the Revenue cannot arbitrarily reopen settled issues without material change, thereby upholding the Tribunal’s decision and reversing the High Court. This judgment reinforces the exemption framework for religious institutions while cautioning against its broad application beyond the case’s unique facts.