Supreme Court Dismisses Income Tax Department Petition, Upholds Refund Order For Vodafone Idea

The Supreme Court dismissed the special leave petition filed by the Income Tax Department in regards to Vodafone Idea Ltd., upholding a decision by the Bombay High Court, which had directed the tax authorities to process the company’s income tax refund as per its return.

The legal proceedings began when VIL filed a writ petition before the high court, requesting that the department issue the refund, which had been delayed due to the tax department not passing a final assessment order within the prescribed time limit under Section 144C(13) of the Income Tax Act. On Nov. 8, 2023, the high court ruled in favour of the company, directing the department to issue the refund along with applicable interest within 30 days.

Following this order, VIL received the tax refund, amounting to Rs 1,647 crore, including the interest, on Dec. 8, 2023.

In response to the high court's order, the department filed an SLP with the Supreme Court in January 2025, seeking to challenge the ruling. However, on Monday, the Supreme Court dismissed the petition on grounds of delay, effectively upholding the high court's decision. As a result, no further amounts are expected to be received by the company from the tax authorities following this judgment.

The stock fell as much as 5.84% during the day to Rs 9.36 apiece. It pared losses to trade 5.53% lower at Rs 9.39 apiece, as of 03:01 p.m. This compares to a 1.40% decline in the benchmark Nifty.

The share price has fallen 34.79% in the last 12 months. The total traded volume so far in the day stood at 1.4 times its 30-day average. The relative strength index was at 65.

Out of the 22 analysts tracking the company, four have a 'buy' rating on the stock, six recommend 'hold' and 12 suggest 'sell', according to Bloomberg data. The average of 12-month analysts' price target implies a potential downside of 11.3%