Supreme Court issues Notice on Centre’s Plea Claiming Power to Levy Interest & Penalty on IGST Under Unamended Customs Tariff Act [Read Order]
The Supreme Court has issued notice to examine whether interest and penalty can be levied on IGST under the unamended Customs Tariff Act
![Supreme Court issues Notice on Centre’s Plea Claiming Power to Levy Interest & Penalty on IGST Under Unamended Customs Tariff Act [Read Order]](https://images.taxscan.in/h-upload/2026/01/30/2122561-supreme-court-issues-notice-centres-plea-claiming-power-levy-interest-penalty-igst-under-unamended-customs-tariff-act-taxscan.webp "Supreme Court issues Notice on Centre’s Plea Claiming Power to Levy Interest & Penalty on IGST Under Unamended Customs Tariff Act [Read Order]")
The Supreme Court of India has issued notice in case dealing with the question of whether interest and penalty can be levied on Integrated Goods and Services Tax (IGST) on imported goods under Section 3(12) of the Customs Tariff Act, 1975, as it existed before being amended by the Finance Act 2 of 2024. The case comes from a judgment of the Bombay High Court which held that...
The Supreme Court of India has issued notice in case dealing with the question of whether interest and penalty can be levied on Integrated Goods and Services Tax (IGST) on imported goods under Section 3(12) of the Customs Tariff Act, 1975, as it existed before being amended by the Finance Act 2 of 2024.
The case comes from a judgment of the Bombay High Court which held that interest and penalty could not be levied on IGST. Unhappy with the High Court’s decision, the Union of India approached the Supreme Court by filing a Special Leave Petition.
Before the Supreme Court, the State's counsel argued that Section 3(12) of the Customs Tariff Act, before its amendment, amounted to legislation by reference. They argued that once the power to levy IGST is brought in, the power to levy interest and penalty would also come along with it. They relied on the Constitution Bench judgment in Ujagar Prints v. Union of India to support his stand.
Appearing for A. R. Sulphonates Private Limited, counsel argued that there was no clear provision in the unamended law which allowed the levy of interest and penalty on IGST. They relied on the dismissal of the Special Leave Petition in Union of India v. Mahindra & Mahindra and also on the Supreme Court’s judgment in CCE Ahmedabad v. Orient Fabrics Ltd. to say that interest and penalty cannot be imposed without specific authority in law.
A Bench of Justice K.V. Viswanathan and Justice Vipul M. Pancholi observed that the issue raised an important question of law relating to the scope of Section 3(12) of the Customs Tariff Act. Looking at the nature of the dispute, the Court felt that notice should be issued in the matter.
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The court condoned the delay in filing the Special Leave Petition, issued notice to the respondent. The court listed the matter for further hearing on 7 April 2026. The Supreme Court will now examine whether, under the unamended Customs Tariff Act, levy of interest and penalty on IGST was legally permissible or not.
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