The world?s largest tea grower, McLeod Russel is ready to take its battle against the retrospective amendments in Union Budget 2012 ? which will cost it R50 crore in back taxes ? to the Supreme Court. It has challenged the constitutional validity of the retrospective amendments at the Calcutta High Court and will move the highest court if it doesn’t get a favourable verdict. Sources close to the development said the company was ready to ?fight till the last?.
McLeod Russel acquired Borelli Tea Holdings from the Magor family of England in 2005 and took over 17 tea estates with Williamson Assam. The deal was struck for R165 crore and another R30-35 crore towards non-compete fees.
Later, in 2008, the income tax department asked the Kolkata-based McLeod Russel to pay around R50 crore in taxes including interest payable. McLeod Russel challenged the tax claim at the income tax tribunal. Barely a month back, the company filed a writ petition with the Calcutta High Court challenging the constitutional validity of the retrospective amendments to tax laws.
While the company declined to comment on the issue, sources said it has also disputed the amount being charged by the income tax department.
Earlier, the UK?s Vodafone won a five-year legal tussle against the Indian tax authorities and the Supreme Court dismissed the tax demand over the telecom giant?s acquisition of Indian assets in 2007. Sources said that McLeod Russel decided to take the battle to the courts as there was no violation of the law of the land for which it can be penalised.
The company is answerable to its shareholders for corporate governance and ensure its interests are protected, said sources close to the developments.