The Delhi High Court has intervened in a significant tax dispute involving InterGlobe Aviation, which operates IndiGo Airlines, by restraining tax authorities from taking coercive actions related to a ₹458 crore Goods and Services Tax (GST) demand. The court's Division Bench, led by Justice Nitin Wasudeo Sambre and Justice Ajay Digpaul, observed that the payments received by IndiGo from an overseas aircraft engine manufacturer appeared compensatory in nature rather than a taxable supply under GST law. This dispute arose from payments made after certain aircraft engines developed faults, leading to grounded planes during the 2018-19 and 2019-20 periods. IndiGo argued that these payments, totaling around ₹2,000 crore in credit notes, were not for services but rather to offset losses caused by the engine failures. The tax authorities, however, claimed that the payments were for tolerating deficiencies in engine performance, thus attracting GST. IndiGo's legal counsel pointed out that the payments were purely compensatory and highlighted that the airline had already paid GST on the import of the engines. The High Court has scheduled the next hearing after the court vacation, ensuring no coercive measures against the airline in the interim.