Allahabad HC Stays ₹110 Crore GST Proceedings Against Dabur Over ‘Hajmola Candy’ Classification Dispute [Read Order]
The Allahabad High Court stayed ₹110 crore GST proceedings against Dabur India Ltd. over the classification of “Hajmola Candy,” citing prior Supreme Court rulings and pending judicial review.
Allahabad HC - GST - Hajmola Candy - taxscan
Allahabad HC - GST - Hajmola Candy - taxscan
In a recent ruling, the Allahabad High Court stayed GST proceedings amounting to ₹110 crore initiated against Dabur India Ltd. in connection with a classification dispute over “Hajmola Candy.”
Dabur India Ltd., the petitioner, filed a writ petition challenging the show cause notice issued by the tax authorities under the GST regime regarding the applicable tax rate on “Dabur Hajmola Candy Tablets.”
The petitioner’s counsel argued that the same issue had previously arisen under the earlier Central Excise and Customs laws and had been repeatedly decided in Dabur’s favor. The counsel explained that the matter had even reached the Supreme Court, which, in Civil Appeal Nos. 5172-5177 of 2002, decided on 12 April 2022, had finally ruled in favor of the company.
The counsel further argued that the statutory framework under GST had not altered the position settled by the Supreme Court.
The counsel pointed out that although the World Customs Organization (WCO) might have made changes in tariff classification affecting customs duty in other countries, such developments had no bearing on the domestic tax position within India.
The petitioner’s counsel also argued that the show cause notice was time-barred and that there had been no concealment of material facts.
The Division Bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla observed that the matter required consideration on the issue of limitation and judicial discipline. The court granted four weeks’ time to the respondents to file a counter affidavit and allowed the petitioner two weeks thereafter to file a rejoinder.
Pending further hearing, the High Court ordered that all proceedings pursuant to the impugned show cause notice would remain stayed.
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