The Bombay High Court has granted ad-interim protection to Skoda Auto Volkswagen India Pvt. Ltd. in its challenge to a GST-related order dated December 29, 2023, after the company contended that the adjudicating authority had failed to properly consider a relevant CBIC circular and the distinguishing features of its case from the Supreme Court’s ruling in Northern Operating Systems Pvt. Ltd.
A Division Bench comprising Justice Suman Shyam and Justice Advait M. Sethna passed the order on August 3, 2026, in Writ Petition No. 9802 of 2024. The petition has been filed against the Additional Commissioner, CGST, Pune-I and other respondents.
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The dispute arises from the order which has been challenged by Skoda Auto Volkswagen before the High Court. The petitioner’s principal grievance, as recorded by the Court, is that the impugned order was issued without taking into account a CBIC circular, despite the company having placed before the designated officer a detailed comparison intended to establish that its factual circumstances were different from those considered by the Supreme Court in C.C., C.E. & S.T. Bangalore (Adjudication) etc. v. M/s. Northern Operating Systems Pvt. Ltd.
The Supreme Court decision referred to by the petitioner is Civil Appeal Nos. 2289-2293 of 2021, decided on May 19, 2022. The Bombay High Court order records that Skoda Auto Volkswagen had specifically attempted to distinguish its case from the factual and legal circumstances considered in that judgment.
The petitioner’s case before the High Court is essentially that the adjudicating authority ought to have examined the matter in light of the applicable CBIC circular and the differences identified by the company rather than applying the Supreme Court ruling without adequately considering those distinctions.
The High Court, at this stage, has not finally determined whether the petitioner’s interpretation is correct. The order records the submissions advanced by the petitioner and proceeds to issue notice to the respondents while granting interim protection.
An important factor considered by the Bench was the petitioner’s submission that an identical issue is already pending before the Bombay High Court in another writ petition.
Senior Advocate Rohan Shah relied upon an order dated February 7, 2024, passed by a coordinate Bench in Writ Petition No. 1679 of 2024, where, according to the petitioner, an ad-interim order of stay had already been granted in relation to the same issue. The Bench perused the order produced by the petitioner.
The respondents did not appear before the Bench despite service of a copy of the petition. The Court also took on record the affidavit of service tendered by the petitioner.
Considering the submissions and the material placed before it, the High Court directed issuance of notice to the respondents.
The matter has been made returnable on September 10, 2026. The petitioner has also been directed to take the necessary steps for issuance of the Court notice and furnish a copy in the Registry for that purpose.
The significant immediate relief granted by the Bombay High Court is the protection against coercive recovery or other coercive measures.
After hearing the petitioner’s prayer for interim relief, the Bench granted ad-interim relief in terms of prayer clause (c). Consequently, the Court directed that no coercive step shall be taken against Skoda Auto Volkswagen India Pvt. Ltd. without the leave of the Court.
This protection will prevent the respondents from taking coercive measures against the petitioner while the High Court considers the challenge, unless the Court itself permits such action.
The August 3 order is an interim order and does not finally adjudicate the underlying GST dispute. The Court has merely issued notice and granted ad-interim protection at this stage.
The central legal controversy will therefore require further consideration, particularly regarding the applicability of the CBIC circular relied upon by the petitioner and whether the facts of Skoda Auto Volkswagen’s case can be distinguished from the principles laid down by the Supreme Court in Northern Operating Systems.
The next significant hearing is scheduled for September 10, 2026, when the respondents are required to respond to the proceedings. Until then, the interim direction restraining coercive action remains an important safeguard for the petitioner.
The Bombay High Court’s order provides interim protection to Skoda Auto Volkswagen India in a GST dispute where the company alleges that the adjudicating authority ignored a relevant CBIC circular and failed to consider factual distinctions from the Supreme Court’s Northern Operating Systems ruling. While the Court has not yet ruled on the merits, it has issued notice and restrained the GST authorities from taking coercive steps against the petitioner without the Court’s permission.
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