COLUMBIA SPORTSWEAR COMPANY V. DIT
Columbia Sportswear Company v. DIT, Bangalore (Special Leave Petition (C) No. 31543 of 2011)
- Whether a ruling of AAR can directly be challenged before the Supreme Court under Article 136 of the Constitution or it has to be first challenged before the High Court under Articles 226 and/or 227 of the Constitution.
- The Authority for Advance Rulings (AAR) is a tribunal under Articles 136 and 227 of the Constitution of India. This means that its rulings can be challenged directly in the Supreme Court or in the High Court, respectively.
- The Petitioner before the Hon’ble Supreme Court is a company incorporated in the USA and is engaged in the business of designing, developing, marketing, and distributing outdoor apparel.
- The Petitioner, after obtaining approval from the RBI, established a liaison office in Chennai for making purchases for its business.
- The RBI granted the permission with the condition that the office of the petitioner shall
be purely for liaison activities, and the liaison office will not undertake any other activity of trading, commercial, or industrial nor shall it enter into any business contracts in its own name without the prior permission of the RBI.
- The Petitioner filed an application before the Authority for Advance Ruling [hereinafter referred to as “AAR”] on the questions relating to its transactions in its liaison office in India.
- The AAR gave its ruling in favour of the department and against the petitioner.
- The petitioner, aggrieved by the ruling of the AAR, filed the present SLP before the Hon’ble Supreme Court of India.
- The Supreme Court of India held that the Authority for Advance Rulings (AAR) is a tribunal under Articles 136 and 227 of the Constitution of India.
- This means that its rulings can be challenged directly in the Supreme Court or in the High Court, respectively.
- However, the Supreme Court also held that the AAR’s rulings should not be challenged directly in the Supreme Court unless the case raises a substantial question of general importance or a similar question is already pending before the Court for decision.
- In the present case, the Supreme Court found that the questions raised by the petitioner were not of general importance and that no similar question was pending before the Court for decision.
- Therefore, the Court dismissed the petitioner’s special leave petition and granted it the liberty to move the appropriate High Court under Article 226 and/or 227 of the Constitution.