Dabur India Ltd. Vs Union of India And 5 Others (Allahabad High Court)
The Allahabad High Court has temporarily stayed the proceedings related to a ₹110 Crore GST demand issued against Dabur India Ltd. concerning the classification of Hajmola Candy/Tablets. The core issue is whether the product should be taxed at a higher GST rate, which the revenue department is proposing, possibly influenced by classification changes made by the World Customs Organization (WCO) for customs duty in foreign countries. Dabur argued that the classification issue has a definitive judicial precedent in its favor under the previous excise and customs regimes. Specifically, the Supreme Court, in Civil Appeal No. 5172-5177 of 2002 (order dated April 12, 2022), finally settled the matter in favor of Dabur, holding that the product’s classification, which determines the rate of duty, had not been materially altered by the subsequent GST regime. Dabur contended that this binding Supreme Court judgment should apply, and seeking a higher rate now violates judicial discipline and raises issues of limitation as there was no concealment of facts. The High Court, after hearing both parties, granted the respondents four weeks to file a counter affidavit and stayed the proceedings pursuant to the show cause notice until the next listing.
