Bombay High Court
IPCA LABORATORIES LTD.versusUNION OF INDIA THROUGH THE JT. SECRETARY, DEPT. OF REVENUE, MINISTRY OF FINANCE AND ORS
- Decided
- Disposal
- Disposed Off
Holding
Interest on IGST cannot be levied in the absence of a specific statutory provision, and the petition challenging its collection is allowed.
Summary
IPCA Laboratories Ltd. filed a writ petition challenging the Union of India's collection of interest on Integrated Goods and Services Tax (IGST) levied under Section 3(7) of the Customs Tariff Act, 1975 for imports made between October 2017 and March 2018. The petitioner contended that neither the Customs Tariff Act nor the Customs Act, 1962 provides for the imposition of interest on such IGST, making the collection unlawful. The respondents attempted to justify the interest but the Court noted that the matter was no longer res integra in view of its earlier decisions in Mahindra & Mahindra Ltd. (Automotive Sector) Vs Union of India & Ors. and Leben Laboratories Pvt. Ltd. Vs Union of India & Ors. Both precedents held that interest could not be levied without a statutory basis. Accordingly, the Court allowed the writ petition, directing the petitioner to apply for a refund of the interest, which must be considered within 16 weeks. The petition was thereafter disposed.
Issues considered
- Whether interest can be levied on IGST under Section 3(7) of the Customs Tariff Act, 1975 or any provision of the Customs Act, 1962
- Whether the collection of such interest is ultra vires the statutory framework
Legislation cited
Subjects
- IGST
- interest
- Customs Tariff Act
- Customs Act
- tax refund
- writ petition
- statutory interpretation
- customs duty
Judgment
38-wp 14846-23.doc
ARJUN IN THE HIGH COURT OF JUDICATURE AT BOMBAY
MACHHINDRA
KADAM CIVIL APPELLATE JURISDICTION
Digitally signed by
ARJUN WRIT PETITION NO. 14846 OF 2023
MACHHINDRA
KADAM
Date: 2026.10.07
10:14:57 +0530 IPCA Laboratories Ltd. … Petitioner
Versus
Union of India & Ors. ... Respondents
__________________________
Mr. Parth Parikh a/w. Mr. Yash Prakash i/b Economic Laws Practice
for the Petitioner.
Mr. Karan Adik a/w. Ms. Sangeeta Yadav for the Respondent-State.
__________________________
CORAM : M. S. KARNIK AND
SANDESH D. PATIL, JJ.
DATED : 6th OCTOBER, 2026.
P.C. :
1. Heard learned counsel for the petitioner.
2. The petitioner has filed this petition challenging the
action on the part of the respondents in collecting interest on
Integrated Goods and Services Tax (‘IGST’) levied under Section 3(7)
of the Customs Tariff Act, 1975 with respect to import of goods
during the period October, 2017 to March, 2018, despite there being
no charging provision either under the Customs Tariff Act, 1975 or
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the Customs Act, 1962 for imposition of interest on such IGST.
3. Mr. Adik, learned counsel for the respondents invited our
attention to the Affidavit-in-Reply and made an attempt to justify the
interest which was levied on Integrated Goods and Services Tax.
However, the issue is no more res integra in view of decision of this
Court in Mahindra & Mahindra Ltd. (Automotive Sector) Vs. The
Union of India & Ors1. Our attention is also invited to the decision of
this Court dated 1st September, 2026 in a petition filed by Leben
Laboratories Pvt. Ltd. Vs. Union of India & Ors. in Writ Petition No.
15373 of 2025.
4. In such view of the matter, the writ petition deserves to
be allowed.
5. Learned counsel for the petitioner submits that the
petitioner would make an application to the respondents/proper
authority for refund of the amount of interest.
6. If such an application is made, the application be
considered expeditiously in any case within a period of 16 weeks
from the date of receipt of the application.
7. It is for the petitioner to satisfy the authority that the
1 2022 (10) TMI 212-Bom. HC
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component of interest has not been passed on further to the buyers/
customers.
8. The petition is disposed of.
(SANDESH D. PATIL, J.) (M. S. KARNIK, J.)
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