The Karnataka High Court recently on 24-09-2009 in a batch of income tax appeals decided in the case of CIT (Intl. Taxation) v. Samsung Electronic Co. Ltd., (185 TAXMAN 313) holding that it is statutory obligation on a person remitting any sum payable to non-resident to seek determination of the withholding tax u/s 195(2) on the appropriate proportion of sum chargeable under Indian Income Tax Act, 1961. In coming to the aforesaid conclusion, their Lordships relied heavily on the decision of the Hon’ble Supreme Court in the case of Transmission Corpn. of A.P. Ltd. v. CIT [1999] 239 ITR 587. In other words, the Karnataka High Court held that it is mandatory to approach the assessing officer before remitting the sum to non-resident. This decision will have a grave impact on all persons who pay amounts to non-residents or foreign companies in their day-to-day working. The Supreme Court has granted stay of recovery of demands arising in some cases from the judgment of Karnataka High Court by their Order Dated 18-12-2009 in GE India Technology Cen. P. Ltd v CIT in Petition(s) for Special Leave to Appeal (C) Nos.34306-07/2009 & Others and issued notice returnable in 4 weeks for further hearing. Now the case is posted for final hearing on 18-08-2010. The Karnataka High Court decided the appeals in Samsung’s case without considering the current law streamlined by the Government of India vide various circulars issued through CBDT and RBI in this regard by dispensing with the requirement of obtaining NOC/Tax Clearance Certificate from the assessing officers u/s 195(2) of the Act with effect from 18-11-1997. Therefore, I have enlightened the new procedure streamlined by the Government of India with effect from 18-11-1997 and in the light of such new procedure, I am of the view that the decision of the Karnataka High Court is not based on current law. Therefore, I humbly request your good office to publish this article “Karnataka High Court decision in CIT (Intl. Taxation) v. Samsung Electronic Co. Ltd., (185 TAXMAN 313) is not based on current law” immediately so that our professional colleagues will understand the consequential implications of the Karnataka High Court decision and also that the professional colleagues in the Supreme Court may get benefit of this article while addressing the case before the Hon’ble Supreme Court. The law laid down by the Karnataka High Court has severe ramifications on every remittance made by resident Indian tax payers to non-residents or foreign companies. There will be hue and cry once the Karnataka High Court Decision will be upheld by the Supreme Court. This line of reasoning may probably help the corporates who are interested in this issue.