Sales Tax Subsidy Received Under State Industrial Policy Constitutes Capital Receipt, Not Liable To Income Tax: Punjab and Haryana High Court

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Sales Tax Subsidy Received Under State Industrial Policy Constitutes Capital Receipt, Not Liable To Income Tax: Punjab and Haryana High Court

Direct Tax

Published on

04/03/2026

By Mariya Paliwala

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The Punjab and Haryana High Court has ruled in favour of Vardhman Textiles Ltd, holding that sales tax subsidy received under a State Industrial Policy constitutes a capital receipt and is not liable to income tax. The bench of Justice Jagmohan Bansal and Justice Amarinder Singh Grewal has observed that the subsidy was linked to…

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Mariya Paliwala https://www.jurishour.in/

Mariya is the Senior Editor at Juris Hour. She has 7+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started her career as a freelance tax reporter in the leading online legal news companies.

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Sales Tax Subsidy Received Under State Industrial Policy Constitutes Capital Receipt, Not Liable To Income Tax: Punjab and Haryana High Court

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