Now Reading: Bombay HC releases Volkswagen tax case 1.5 years after reserving verdict
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Bombay HC releases Volkswagen tax case 1.5 years after reserving verdict
Bombay HC releases Volkswagen tax case 1.5 years after reserving verdict
The Bombay High Court has released the Volkswagen tax petition for re-argument, 16 months after reserving judgment. The bench of Justices BP Colabawalla and Firdosh Pooniwalla, which heard the matter over six…
The Bombay High Court has released the Volkswagen tax petition for re-argument, 16 months after reserving judgment. The bench of Justices BP Colabawalla and Firdosh Pooniwalla, which heard the matter over six days in April 2025, said it could not pronounce the verdict due to the exigency of work. The court directed that the matter be placed before the regular bench handling indirect tax petitions from 2025.
Volkswagen's Indian unit, Skoda Auto Volkswagen India Pvt Ltd, had challenged a Rs 11,526 crore ($1.4 billion) customs duty demand. Customs authorities alleged the company misclassified imports of car parts for its Aurangabad plant as individual components instead of Completely Knocked Down (CKD) kits, which attract higher duties. The show-cause notice covered about 33,000 transactions between March 2012 and July 2024.
The bench had limited its judgment to whether the show-cause notice was time-barred. The court has ordered status quo for four weeks to allow Volkswagen to move the matter before the new bench. The entire case will now be re-argued.
Indian Opinion Analysis
The delay highlights a structural problem: High Court benches that reserve judgments and then sit on them for months, even years, before releasing the matter. The Supreme Court's 2023 ruling in State of Rajasthan v. Balchand requires judgments within three months of reserving, with a possible three-month extension. Here, the 16-month gap exceeds that limit, and the court's own workload is cited as the reason. For Volkswagen, the stakes are high: Rs 11,526 crore in unpaid duty plus interest and potential confiscation of goods. The new bench will hear the entire case afresh, likely pushing any final decision into late 2026 or early 2027. The core question remains whether customs issued the notice within the legal time limit, given that the alleged misclassification spans 12 years and the DRI raid uncovered new information.
The next date of hearing before the new bench is awaited.
Source: barandbench.com
This brief was synthesised by AI from the source linked above.
