SC ruling on tax exemption may trigger a fresh slew of litigation

Experts say the SC ruling should help cut down on protracted litigation related to interpretation of exemption provisions

The Supreme Court ruling in favour of tax department in cases that involve ambiguity in tax exemption clause may trigger a fresh slew of litigation. Experts said the department was likely to re-open similar cases that were decided with a liberal interpretation of tax laws, in favour of the assessee. 

Further, the five-judge bench in its order on Monday put the onus on the assessee to demonstrate they meet all the conditions for availing any exemption. This will mean businesses will have to be extra careful in planning tax exemptions and holidays, experts said. "The burden of proof will go up