The Supreme Court dismissed a petition filed by the Income-Tax Department against Zee Telefilms seeking to "recover tax" amounting to more than Rs 46 crore from the entertainment major.
A bench comprising Justice Markenday Katju and Justice V S Sirpurkar dismissed the appeal on the grounds that the department took 761 days to move court against the largest producer of Hindi films.
It came down heavily on the government observing that it has become usual for income-tax officials to delay such petitions.
The bench gave no importance to the department's plea that its Mumbai office had been requested to fix responsibility for the inordinate delay and to obtain explanation for it so that action can be taken.
Stating that the revenue involved is recurring in nature, the department argued that the Bombay High Court, which dismissed its plea, ought to have considered that public interest would suffer if such cases were "thrown out merely on grounds of delay".
According to the department, the income-tax tribunal was not right in allowing deductions on giving cinematographic films rights to overseas customers on lease even though the profit Zee derived was not from the export of goods or merchandise.
