Schloss HMA Pvt Ltd Vs Union of India & Ors (Bombay High Court)
Schloss HMA Pvt Ltd filed a writ petition before the Bombay High Court, challenging the GST applicability on corporate guarantees issued to its subsidiaries. The petitioner argued that such guarantees do not constitute a “supply” under Section 7 of the CGST Act, 2017, and therefore should not be subject to tax under Section 9. Additionally, the petition sought to invalidate certain circulars, rules, and notifications issued in 2023 and 2024, claiming they were arbitrary and violated constitutional provisions. The petitioner also contested an adjudication order and a show cause notice issued in 2024, arguing that even if corporate guarantees were deemed taxable, they should fall under interstate supply and be governed by IGST, rather than CGST and State GST laws.
During the hearing, the court granted the State’s request for time to file an affidavit in response to the petitioner’s claims regarding IGST applicability. Pending further proceedings, the High Court issued an interim stay on the impugned adjudication order and show cause notice, preserving the petitioner’s position. The matter has been scheduled for a further hearing on February 18, 2025.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
