Supreme Court agreed on Thursday to hear a petition seeking the cancellation of this weekend's Indian Grand Prix because organisers have allegedly not paid entertainment taxes for the 2012 event.
"We will hear the petition tomorrow," chief justice P Sathasivam said in court, announcing a new legal snag for Formula One in India which has been dogged by problems since the inaugural 2011 event.
The Supreme Court has executive powers and ordered organisers two years ago to freeze 25% of ticket revenues until they had settled a tax dispute with the state where the racetrack is located.
That ruling came in response to Public Interest Litigation filed by campaigner Amit Kumar, who is also behind Thursday's petition seeking the cancellation of the race on Sunday.
Kumar successfully argued in 2011 that Formula One was entertainment and not sport, and should not benefit from tax exemptions granted by the state of Uttar Pradesh which borders the capital New Delhi.
Entertainment tax, applicable for large-scale shows and sponsored festivals, has been levied on tickets this year for the first time.
A spokesman for circuit owner Jaypee Sports International Limited acknowledged previous tax problems in 2011 but refused to comment on the new problems.
"We will wait for the court's directive this time around as well. Whatever the court says, we are ready to follow," Askari Zaidi told AFP.
Asked about the claim that taxes had not been paid in 2012, he replied: "Why should we comment on somebody's allegation?"
Formula One supremo Bernie Ecclestone had already removed India from the 2014 schedule, leaving the future of the event at the $450 million Buddh International Circuit in doubt.
After initially citing "logistical" problems, the billionaire was quoted in July as saying that "political" reasons caused India to miss out next year -- believed to mean the lack of government support for his private empire.
Red Bull driver Sebastian Vettel was expected to seal the world title in Sunday's race, with local motorsports enthusiasts hoping that a successful contest could improve the chances of an Indian GP in 2015.
"With venues in other countries also fighting for slots, we can't afford to miss out in 2015," Vicky Chandhok, who heads the Federation of Motor Sports Clubs of India, told AFP.
"But I am optimistic that the promoters will work out an agreement with Formula One to have two more races. We have a great facility here," added Chandhok, who is the father of Indian driver Karun.
The privately-owned Jaypee Sports International Limited, which stands to lose the most if the race does not return, insists that it will be back in 2015.
"If we get another race, it will be by default, not by design," motorsports writer Harish Samtani told AFP.
"But I am not optimistic. F1 is not meant for this country."
The lavish F1 roadshow rolled into Greater Noida, a burgeoning satellite of New Delhi, in 2011 and its slick organisation helped to erase some of the memories of the chaotic Commonwealth Games of the previous year.
But while the inaugural race drew 95,000 spectators to the 100,000-capacity circuit, numbers fell to around 65,000 last year. Sluggish ticket sales this year could see figures drop further.