Court Clash: HSBC Accuses Government of Ignoring Order, Demands Money

17 Jan 2024 , 01:10 AM

HSBC has accused the Central government of being in contempt of court for allegedly disobeying the Bombay High Court’s decision to refund service tax.

In a previous ruling on a service tax dispute, the Bombay High Court found in favour of HSBC and ordered the tax department to reimburse the service tax. According to HSBC, the administration has disregarded the court’s ruling.

HSBC underwent an audit of its books and records from March 2007 to 2012. The auditor brought to HSBC’s attention that it had failed to pay service tax on the interchange money it had received throughout this time. Despite the tax department not making a service tax demand, HSBC voluntarily deposited Rs 56 crore following the release of the audit findings.

Following the release of the final audit report, HSBC requested a refund since the tax department had appropriated the deposited funds without issuing a notice of cause.

The petitioner had paid the money openly, according to the tax department, and the validity of the deposit was immaterial because the Supreme Court was considering a case involving a related issue.

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