The Madras High Court has reserved its judgment on a lengthy legal battle between Tamil superstar-turned-politician C. Joseph Vijay (Thalapathy Vijay) and the Income Tax (I-T) Department. Justice Senthilkumar Ramamoorthy, on Friday, closed the last hearing on a writ petition filed by the actor in 2022. The case investigates a ₹1.5 crore penalty imposed by the tax department a fight that dates back more than a decade to the making of the fantasy-action film Puli in 2015.
At the Heart of the 11-Year-Old Conflict
The fallout started when I-T sleuths mounted a massive search and seizure operation in September 2015. Raids were conducted at the actor’s residence and the offices of SKT Studios, the producers of Puli.
The department reportedly found evidence that during the investigation which:
- Cash Payments: Producers P.T. Selvakumar and Shibu allegedly sent Vijay ₹4.93 crore cash in addition to his official remuneration of ₹16 crore paid via cheque.
- Unaccounted Income: Although TDS was paid for that cheque amount, no tax was initially filed for the cash transaction.
- The Surrender: Confronted with incriminating documents, the actor was said to have acknowledged receiving the cash, and agreed to disclose another ₹15 crore income from the 2015-16 financial year to settle the matter amicably.
Why the Penalty is Contested
Vijay submitted his returns, with a total income of ₹35.42 crore reported (inclusive of ₹15 crore) which however the department has disallowed, some such as depreciation and his fans' club expense (Rasigar Mandram).
The ongoing legal standoff revolves around section 271AAB(1) of the Income Tax Act. Vijay’s lawyers counter that:
- Limitation Period: The penalty was applied in 2022, although the defense maintains that it should have been initiated by June 2019.
- Voluntary Disclosure: As mentioned above, the actor said he voluntarily declared income in his returns after the raid, warranting a strict penalty.
The I-T Department, however, says the disclosure was “forced” by the search and it was not voluntary, which justifies the penalty.
Wider Context: Political and Cinematic Influence
This case arrives at a crucial moment for Vijay. Having recently formed his political party, Tamilaga Vettri Kazhagam (TVK) and with his last film Jana Nayagan out this month, any legal ruling holds enormous public weight.
Prior, Vijay had faced another tax challenge over the import of a Rolls-Royce Ghost in 2012, which was resolved after the High Court slammed the importer’s delay in making tax payment.
What Happens Next?
A final verdict to this end is forecast to be reached in the next weeks, having the Madras High Court reserved its order. In the event the court rules in favor of the department, the actor may need to settle for the ₹1.5 crore fine plus interest built up. If the court takes the “limitation period” argument, it should be a significant legal victory for the actor.
