IMS Mercantiles Ltd Vs Union of India & Anr. (Delhi High Court)
The petitioner, a firm engaged in the wholesale and retail business of lithium-ion and other batteries, filed a writ petition challenging a rectification order dated 24 July 2025 issued by the Additional Commissioner, Central Tax (Delhi West). The dispute arose after a search was conducted at the petitioner’s premises on 12 March 2021 based on alleged tax evasion. A Show Cause Notice dated 3 August 2024 alleged misdeclaration of the GST rate under HSN Code 8507 by applying 18% instead of 28%, resulting in short payment of tax. The petitioner replied on 18 September 2024, but the Adjudicating Authority passed an Order-in-Original on 10 January 2025 confirming the demand. The petitioner then filed a rectification application under Section 161 of the CGST Act. Due to delay in rectification and the risk of limitation expiry for filing an appeal, the petitioner approached the High Court in another writ petition, where the primary issue recorded was whether combo packs containing chargers and rechargeable batteries attracted GST at 18% or 28%. The petitioner also argued that the concerned product constituted only 3% of its turnover, yet tax was imposed on the total turnover.
