McDowell & Company Limited. vs CTO
| Mc Dowell & Company Limited vs The Commercial Tax Officer | |
|---|---|
| Court | Supreme Court of India |
| Full case name | Mc Dowell & Company Limited vs The Commercial Tax Officer |
| Decided | April 17, 1985 |
| Citation | 1986 AIR SC 649, 1985 SCR (3) 791, (1985) 22 Taxman 11 |
| Court membership | |
| Judges sitting | O. Chinnappa Reddy, Misra Rangnath, Y. V. Chandrachud, D.A. Desai, E.S. Venkataramiah |
| Case opinions | |
| Decision by | Misra Rangnath for the majority and O. Chinnappa Reddy concurring but separate opinion |
| Concurrence | All |
| Dissent | None |
McDowell & Company Limited vs CTO (1986 AIR 649) is one of the earliest cases in independent India dealing with the concepts of tax planning and Tax Evasion. The case pertained to whether excise duty paid is a part of "turnover," for the computation of sales tax under the Andhra Pradesh General Sales Tax Act, 1947 of a liquor manufacturer when the excise duty is paid directly by the purchaser to the government exchequer. The Court upheld the legitimacy of tax planning in India and dealt with the legitimacy of transaction structuring to avoid payment of tax.