Mumbai Mumbai. The Customs Department has urged the Bombay High Court to dismiss the Skoda Auto Woakeswagen India's demand for US $ 1.4 billion tax demand, arguing that a acceptance of the petition on the deadline will give 'disastrous results'. Earlier this month, the department filed its affidavit in response to Skoda's petition, which has challenged the show cause notice issued in September 2024. A bench of Justice BP Kolabawala and Firdaus Pooniwala are widely hearing the petition of the automobile company, claiming that the notice is arbitrary and illegal.

Last month, the court directed the department to file an affidavit, stating how the Skoda Auto Volkswagen India demanded a tax of $ 1.4 billion from India, how its notice is not banned by the limit. In its affidavit, the department argued that giving relief to the company on this basis would establish a 'bad example' for car importers, which would potentially encourage them to suppress important information. The affidavit further alleges that Skoda has delayed the investigation by stopping data about its imports and giving misleading information about its import activities.

The Customs Department has claimed that the company incorrectly classified its imports of Audi, Skoda and Volkswagen cars instead of 'fully prepared' (CKD) units 'individual parts' instead of 'individual parts', causing it to pay much low customs duty.

The company said that the demand of more than Rs 12,000 crore was 'excessive'.

Its lawyer Arvind Datar had said in court last month that the matter is a 'case of life and death' for his business in the country.

The main argument of the company was that the department could not demand tax after so many years.