The Bombay High Court has stayed the Goods and Service Tax (GST) demand of Rs. 2,500 Crore against Hindustan Coca-Cola over alleged undervaluation.
The bench of Justice B. P. Colabawalla and Justice Firdosh P. Pooniwalla has observed that the reasoning of the GST department is prima facie incorrect and Hindustan Coca-Cola deserves an interim relief.
The petitioner, Hindustan Coca-Cola has challenged the constitutional validity of Section 15(3) (a) of the CGST Act, on the basis that if the revenue’s interpretation of the section is accepted then the same would be ultra vires Section 15 (1) of the very same Act.
The fundamental point raised in the present Writ Petition is that the department has completely misconstrued the provisions of Section 15(3)(a) of the CGST Act. According to the Petitioner, the way Section 15(3)(a) is being interrupted by the Revenue, not only runs countered to its express language, but if accepted, would run counter to the provisions of Section 15(1), which basically stipulates that the value of supply of goods or services or both shall be at the transaction value.
The petitioner contended that the department came to the erroneous conclusion that the Petitioner’s distributor first extended the discount to the retailers and then the Petitioner, in turn, has given sales discount to the distributor in subsequent supplies on the basis of the discount passed on by him, and which is duly recorded in the Distributor Management System of the Petitioner.
The department contended that the procedure adopted for offering a discount on the basis of past transactions is to circumvent the provisions of the Act GST, by undervaluing the current supplies and evading the payment of GST.
The court while listing the matter on 29 April 2025 granted the interim relief to the petitioner.
Case Details
Case Title: Hindustan Coca-Cola Beverages Pvt. Ltd. Versus Union of India & Ors.
Case No.: Writ Petition No. 3674 Of 2025
Date: April 1st, 2025
Counsel For Petitioner: S. Ganesh (Senior Adv.)
Counsel For Respondent: Maya Mazumdar
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