The Karnataka High Court has issued notice in a writ petition challenging the constitutional validity of the Health Security-cum-National Security Cess Act, 2025 and the Health Security-cum-National Security Cess Rules, 2026, while declining to grant interim relief at the present stage.
The matter was heard by Justice S. Sunil Dutt Yadav at the Principal Bench in Bengaluru in Writ Petition No. 3157 of 2026, filed by M/s Dhariwal Industries Pvt. Ltd. against the Union of India. The case was last listed on 4 February 2026, when notice was ordered, and has now been posted for further hearing on 3 March 2026.
Challenge to Legislative Competence and Capacity-Based Levy
The petitioner has mounted a comprehensive constitutional challenge, contending that the Union Government lacks legislative competence under the Constitution to impose a cess on a presumed or deemed manufacturing capacity, rather than on actual production.
In its prayer, the petitioner has sought a declaration that the Health Security-cum-National Security Cess Act, 2025, along with the Rules framed thereunder, is unconstitutional, asserting that the Constitution does not empower the Union to levy such a cess on assumed manufacture.
The petition specifically assails the capacity-based production model, arguing that levying cess on presumed output—rather than actual quantity manufactured—renders the law arbitrary, unreasonable, and vague, thereby violating Articles 14 and 19(1)(g) of the Constitution of India.
Allegation of Ultra Vires Notifications
The writ petition further seeks quashing of:
- Notification No. S.O. 6153(E) dated 31 December 2025, and
- Notification No. 1/2026 – HSNS Cess dated 1 January 2026,
contending that both notifications travel beyond the scope of constitutional authority and are therefore ultra vires Articles 14 and 19(1)(g).
According to the petitioner, the impugned framework proceeds on an assumption of quantity manufactured, ignoring actual production data, which results in an unreasonable restriction on the freedom to carry on trade and business.
Interim Stay Sought; Court Refrains from Granting Relief
Senior Counsel appearing for the petitioner urged the Court to grant an interim stay on the operation of the Act, Rules, and notifications, relying on interim orders passed in similar matters concerning deemed capacity-based levies.
Opposing the plea, the Additional Solicitor General of India, appearing for the Union of India, submitted that the challenge is directed against a central legislation, which enjoys a strong presumption of constitutionality. It was argued that granting interim relief would effectively stall the implementation of the statute itself, which is impermissible at the interlocutory stage.
After hearing both sides, the High Court observed that the issues raised require detailed consideration. While issuing notice and directing completion of pleadings at the earliest, the Court declined to grant any interim stay, keeping all contentions open for final adjudication.
The writ petition remains pending and is scheduled to be taken up next on 3 March 2026.
Case Details
Case Title: M/S DHARIWAL INDUSTRIES PVT LTD Versus UNION OF INDIA
Case No.: WP/0003157/2026
Date: 04/02/2026
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