McDowell & Co. Ltd. v. Commercial Tax Officer

Holding

Tax avoidance through colorable devices is not permitted, and the court will look to the substance of a transaction in fiscal matters.

Facts

McDowell sought to exclude excise duty from sales tax base through a payment-arrangement device.

Reasoning

The Supreme Court rejected the Westminster approach and adopted a substance-based view of tax avoidance. Although Azadi Bachao softened the stance, McDowell remains a touchstone for Indian anti-avoidance reasoning.