Tax notice: HC asks VW to go beyond 'delay'

MUMBAI: The Bombay HC on Monday sought 'more convincing' arguments than grounds of delay from Skoda Auto Volkswagen India to entertain its plea against a show cause notice from Customs authorities alleging duty evasion of Rs 12,000 crore.

Justice Colabawalla orally remarked during the hearing that he "commends" the officer of the department for his dedicated efforts prior to issuing the show cause notice. "To say the show cause notice is without jurisdiction on the ground of delay is one thing... When the notice was issued only when all this was found via investigation after questioning your officers." The hearing will continue on Tuesday.'

Justice Colabawalla and Justice Pooniwalla was hearing arguments made by additional solicitor general N Venkatraman who said the delay was justified since information about imports as ‘completely knocked down’ parts came to light in its investigation after quizzing and taking down statements of officials and executives of Skoda.
Senior counsel Arvind Datar said the statement in the show cause notice of other importers paying the higher duty rate of 30 percent for CKD parts was questionable and also said the statements of executives never said that the Aurangabad plant—for which the notice was issued— was not a manufacturing unit.
Datar will continue making arguments on Tuesday when he said he would convince and explain why the show cause notice merits judicial intervention at this stage.
The ASG would also make further submissions on why the HC ought not to intervene and must let Skoda meet the issues raised in the notice by replying to the notice first.

The department claimed CKD imports were “misclassified” as individuals parts to attract less duty of 10 percent instead of 30 percent. Skoda said it’s import category was now being misclassified instead as CKD when its was clarified earlier that they were independent parts.

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