Hero Motocorp Limited Vs Union of India (Rajasthan High Court)
In a recent ruling, the Rajasthan High Court dismissed a writ petition filed by Hero Motocorp Limited, challenging a GST show-cause notice issued on August 3, 2024. The company argued that the notice, which proposed an increase in GST from 18% to 28%, was unjust, particularly as other manufacturers in similar circumstances had not received such notices. The petitioner contended that this drastic increase in tax rates could jeopardize their operations, potentially leading to substantial financial losses. They further asserted that the issuance of the notice violated established guidelines from the Central Board of Indirect Taxes and Customs (CBIC), which mandate prior consultation with the Board and the GST Council before altering tax interpretations.
However, the court ruled against the petition, stating that the challenge to a show-cause notice through a writ petition was not permissible under the law. The court noted that Hero Motocorp retains the right to respond to the notice, and any subsequent order will follow the legal process outlined in the Central Goods and Services Tax Act (CGST Act), including an opportunity for a hearing. The court referenced prior judgments, affirming that simply receiving a show-cause notice does not warrant judicial intervention at that stage. Therefore, the court upheld the legality of the notice, allowing Hero Motocorp to address the concerns through appropriate legal channels while emphasizing that any final decisions made would remain subject to appeal.
