The Bombay High Court heard the Customs department defend its $1.4 billion tax demand against Skoda Auto Volkswagen India, asserting the company misclassified items to evade taxes and must comply with legal requirements.
Mumbai: The Bombay High Court on Thursday heard arguments from the Customs department defending its $1.4 billion tax demand against Skoda Auto Volkswagen India, asserting that the company must comply with legal requirements and not portray itself as a “victim.”
During the hearing before a division bench of Justices B P Colabawalla and Firdosh Pooniwalla, Additional Solicitor General (ASG) N Venkatraman represented the Customs department and firmly stated that the law applies equally to all importers.
“You have to follow the law. You have to fall in line. The rule of law is the same for everyone. Similar importers are already paying 30 percent. It is not our fault for issuing this show cause notice,”
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Venkatraman argued.
The Customs department had issued a notice to Skoda Auto Volkswagen India, alleging that the company had misclassified imported items to evade higher taxes. The USD 1.4 billion tax demand was based on this alleged misrepresentation.
Venkatraman strongly rejected the company’s stance, stating that the German automaker must take responsibility for misclassification rather than portraying itself as a victim.
“It is the company’s fault for not classifying the items properly. Don’t be the victim here. If you don’t follow the law, then we will initiate action in accordance with the provisions of law,”
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he asserted.
The government lawyer emphasized that other similar importers were already paying the 30 percent tax as required, and Skoda Auto Volkswagen India could not claim special treatment.
Skoda Auto Volkswagen India had filed a petition last month, challenging the tax demand. The company claimed that the notice was “arbitrary and illegal,” arguing that it had followed the required procedures and classifications for its imports.
The division bench of Justices B P Colabawalla and Firdosh Pooniwalla is currently reviewing the arguments from both sides.
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