Bombay High Court Sides with Microsoft in VAT and CST Dispute

The Bombay High Court has ruled in favour of Microsoft Corporation (India) Pvt. Ltd. in a dispute over VAT and CST payments. The court held that the company could not be treated as having delayed payment when it had paid tax within the time allowed for its six-monthly returns.

The case involved a challenge to two appellate orders concerning FY 2013-14 under the Maharashtra Value Added Tax Act, 2002 (MVAT Act) and the Central Sales Tax Act, 1956 (CST Act). The company had paid tax within the time allowed by the Rules, but the authorities questioned this approach because of the substantial increase in the company's tax collections.

The court rejected the argument that the increase in the company's turnover and tax collections allowed the authority to effectively change the prescribed payment schedule. An authority could not alter the statutory periodicity merely on the basis of its own perception or surmises, the Bench observed.