The Karnataka High Court is set to hear a writ petition filed by M/s Trident Automobiles Private Limited challenging a demand of ₹6.99 crore towards compensation cess, along with interest and penalty, for the period between November 1, 2017 and November 30, 2021.
The matter is pending before Justice S. Sunil Dutt Yadav and is next listed for hearing on March 3, 2026. The petition was filed on February 24, 2026 and was last adjourned on February 27, 2026.
The petitioner has sought quashing of Order-in-Appeal No. 01/2024-25 GST (Commr.) A-II dated April 4, 2024, issued by the Additional Commissioner of Central Tax, which upheld the demand of compensation cess amounting to ₹6,99,96,298 along with applicable interest and penalty.
The writ petition has been filed under Article 226 of the Constitution of India seeking a writ of certiorari or any other appropriate direction to set aside the impugned appellate order.
At the core of the dispute is the interpretation of “ground clearance” under Entry 52B of Notification No. 1/2017–Compensation Cess (Rate) dated June 28, 2017, as amended by Notification No. 5/2017–Compensation Cess (Rate) dated September 11, 2017.
Trident Automobiles has prayed for a declaration that “ground clearance” as referred to in Entry 52B should be interpreted to mean ground clearance in a “laden condition” prior to July 23, 2023. The interpretation is significant in determining the applicable rate of compensation cess on certain sports utility vehicles (SUVs).
The petitioner has further sought a declaration that it correctly discharged compensation cess under Sl. No. 52A of Notification No. 1/2017–Compensation Cess (Rate) in respect of the supply of Hyundai Creta, Hyundai Alcazar and Hyundai Tucson during the disputed period.
The outcome of the case may have broader implications for automobile dealers and manufacturers, particularly in relation to classification of SUVs based on ground clearance and the method of its measurement for compensation cess purposes.
Pending final adjudication of the writ petition, Trident Automobiles has also sought an interim stay on the operation of the impugned appellate order dated April 4, 2024.
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