M/S. ELECTRONICS CORPN. OF INDIA LTD. vs COMMISSIONER OF INCOME TAX

The Supreme Court held that Parliament can enact laws with extra-territorial operation under Article 245(2) of the Constitution of India, affirming that such laws are not invalid solely due to their extra-territorial nature. However, the Court emphasized that a necessary nexus must exist between the law and the territory of India for its validity. The Court dismissed the appellant's challenge to the constitutional validity of Section 9(1)(vii) of the Income Tax Act, 1961, which mandates tax deduction at source for payments to foreign companies for technical services, thereby upholding the High Court's decision.