A bench comprising Justice Vibhu Bakhru and Justice Swarna Kanta Sharma reinstated Samsung’s stay application and directed the ITAT to address the matter promptly based on its merits.
NEW DELHI: In the case of Samsung India, the Delhi High Court on Monday (2nd Nov) set aside an Income Tax Appellate Tribunal (ITAT) decision that had rejected the company’s request to stay a Rs 1,213 crore tax demand for the 2021-22 assessment year.
The Indian division of the South Korean electronics giant sought intervention after the tribunal’s unfavorable ruling.
A bench comprising Justice Vibhu Bakhru and Justice Swarna Kanta Sharma reinstated Samsung’s stay application and directed the ITAT to address the matter promptly based on its merits.
Brief Facts
Earlier, the ITAT had dismissed Samsung’s plea on November 22, citing it as “premature.” The tribunal reasoned that Samsung had not shown any immediate recovery actions by tax authorities when filing the application. It ruled that, in the absence of an imminent threat, there was no basis for granting relief.
This led Samsung to appeal to the Delhi High Court, which ruled in the company’s favor and set aside the ITAT’s decision.
Samsung India has faced previous tax controversies with Indian authorities. In 2023, the Directorate of Revenue Intelligence (DRI) issued a show-cause notice alleging customs duty evasion of Rs 1,728 crore (about $212 million). The DRI claimed that Samsung misclassified remote radio heads, a type of networking equipment, to improperly benefit from customs duty exemptions.
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Adding to its challenges, Samsung is currently experiencing operational disruptions at its Chennai factory, where a three-day workers’ strike has impacted the production of televisions, refrigerators, and washing machines.
The company also faces increased competition in India’s smartphone market. Once a market leader, Samsung now ranks third in volume, trailing Chinese rivals Vivo and Xiaomi. Research firms Counterpoint and Canalys estimate Samsung’s market share at 18% and 17%, respectively, for the April-June quarter, compared to Vivo and Xiaomi, each holding around 19%.
