Bombay High Court
Merck Kgaa vs State Of Maharashtra on 26 August, 2025
Author: M. S. Sonak
Bench: M. S. Sonak
2025:BHC-OS:14236-DB
Sayyed 905-WP.340.2025.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.340 OF 2025
Merck KGaA ...Petitioner
Versus
State of Maharashtra & Ors. ...Respondents
WITH
WRIT PETITION NO.5311 OF 2024
Merck KGaA ...Petitioner
Versus
State of Maharashtra & Ors. ...Respondents
WITH
WRIT PETITION NO.504 OF 2025
Merck KGaA ...Petitioner
Versus
State of Maharashtra & Ors. ...Respondents
_____________________________________________________
Mr. Sushanth Murthy for the Petitioner.
Ms. Jyoti Chavan, Addl. G. P. for the Respondent-State in WP/340/2025
& WP/5311/2024.
Mr. Amar Mishra, AGP for Respondent Nos.1 & 3-State in WP/504/2025
_____________________________________________________
CORAM : M. S. Sonak &
Jitendra Jain, JJ.
DATED : 26 August 2025
ORAL ORDER:-(Per M. S. Sonak, J.)
1. Heard learned counsel for the parties.
2. The learned counsel for the parties state that these three
petitions can be disposed of by a common judgment and order.
Accordingly, we issue a Rule in each of these petitions. With the consent
of and at the request of learned counsel for the parties, we make the
Rule returnable immediately.
Sayyed 905-WP.340.2025.docx
3. These three petitions challenge assessment orders passed by
the Deputy Commissioner of State Tax levying tax under the
Maharashtra Value Added Tax Act, 2002 (hereafter "the MVAT Act") on
payments of royalty made by the subsidiary company (Merck Life
Science Pvt. Ltd.) to the Petitioner for the financial years FY 2015-16,
FY 2016-17 and FY 2017-18 on the allegation that the said royalties
amount to consideration for the transfer of right to use of trademarks.
4. These petitions have been filed invoking the writ jurisdiction
of this Hon'ble Court despite an appeal being available in terms of
Section 26(1)(b) of the MVAT Act to the Appellate Authority, viz. The
Joint Commissioner.
5. A similar issue arose in the case of M/s. Mestra A. G.
Switzerland Vs. The State of Maharashtra & Ors. 1 wherein the
petitioner, by a writ petition, called in question an assessment order
passed by the Deputy Commissioner of Sales Tax levying tax under the
MVAT Act on payments of royalty made by the subsidiary companies to
the petitioner.
6. The Petitioner therein argued that the adjudication order
impugned in the petition had been passed by relying upon a judgment
of the Sales Tax Tribunal. As the issue in dispute had already been
decided against the Assessee by the Tribunal, therefore exploring the
remedy of first appeal provided by section 26(1) of the MVAT Act to the
Joint Commissioner, being the first appellate authority, would be a mere
ritual since the Joint Commissioner was bound by the aforesaid decision
of the Tribunal.
7. By an order dated 16 February 2022, this Hon'ble Court did
not entertain the petition on merits, holding that the Petitioner could
1 Writ Petition No.12297 of 2021 dated 16.02.2022
Sayyed 905-WP.340.2025.docx
invoke Tribunal appellate jurisdiction under section 27 of the MVAT Act
at the appropriate time. This Court nonetheless observed that it was
inclined not to relegate the Petitioner to the first appellate remedy but
to give it the opportunity to prefer an appeal before the Tribunal
directly, if it so chooses, subject to making the requisite pre-deposit. This
Court further held that in the event the Petitioner preferred an appeal
before the Tribunal within six weeks from the date of the order,
limitation would not be a bar for entertaining and trying such appeal on
merits.
8. A Co-ordinate Bench of this Hon'ble Court in the case of
Kellogg Company Vs. The State of Maharashtra & Ors.2 held that it was
bound by the findings of the Judgment in M/s Mestra A. G. Switzerland
(supra), and disposed of a group of petitions in terms of the directions
as contained in paragraph Nos 27 and 28, which read as under:-
"27. However, in the peculiar facts and circumstances, viz.
pendency of this writ petition on the file of this Court for quite
some time and that a Constitutional issue touching Article 286 of
the Constitution is sought to be raised, we are inclined not to
relegate the Petitioner to the first appellate remedy but to give it
opportunity to prefer an appeal before the Tribunal directly, if it so
chooses, so that any infirmity in the impugned order can be
brought to its notice, including he decision of this Court in the case
of Mahyco Monsanto Biotech (India) Pvt. Ltd. (supra), (supra), for its
correction. It is ordered accordingly.
28. We make it clear that such appeal may not be entertained
unless the requisite pre-deposit is made by the Petitioner for
preferring an appeal before the Tribunal. There is a statement in
the writ petition that the requisite pre-deposit for approaching the
first appellate authority has already been made. If indeed that is so,
it would constitute half of the pre-deposit for filing an appeal
before the Tribunal. The balance pre-deposit together with an
acknowledgment of the amount of pre-deposit that has been made,
may be filed along with any appeal that the Petitioner may wish to
prefer before the Tribunal. In the event the Petitioner prefers an
appeal before the Tribunal within six weeks from today, as prayed
2 Writ Petition No.1661 of 2019 dated 27.07.2022
Sayyed 905-WP.340.2025.docx
by Mr. Sridharan, limitation shall not be a bar for entertaining and
trying such appeal on merits."
9. The said common order in the case of Kellogg Company
(supra) disposes of 3 Writ Petitions No.2934, 2038 and 2925 of 2021
filed by the Petitioner (in the case of another subsidiary, Merck India).
10. Both the aforesaid orders were not interfered with by the
Hon'ble Supreme Court in M/s. Mestra A. G. Switzerland Vs. The State
of Maharashtra & Ors.3 wherein the Hon'ble Apex Court granted liberty
to the petitioner(s) to approach the Tribunal as stated by this Hon'ble
High Court. The Court further observed that if the Petitioner files
appeals before the Tribunal within a period of eight weeks from the
date of the order, the issue of limitation would not be raised by the
Tribunal.
11. Mr. Murthy learned counsel for the Petitioner submits that this
Court may consider following the same course of action as was adopted
by the Co-ordinate Bench of this Court in the case of Kellogg Company
(supra). He states that pursuant to the decision of the Co-ordinate
Bench of this Court in Kellogg Company (supra), appeals which were
permitted to be instituted directly before the Tribunal are likely to be
taken up for final disposal on 10 September 2025. He states that if leave
is granted, even the Petitioner will file appeals before the Tribunal and
urge the disposal of such appeals along with the other appeals filed in
pursuance to the orders in Kellogg Company (supra).
12. Mr. Murthy states that the Petitioner, if permitted, will
institute the appeals as soon as possible after complying with the
requirement of pre-deposit, so that such appeals are heard along with
the other appeals by the Tribunal.
3 Special Leave to Appeal (C) No(s).10336/2022 dated 04.11.2024
Sayyed 905-WP.340.2025.docx
13. Ms. Chavan, learned counsel for the Respondent, does not
oppose adoption of the course indicated by the Co-ordinate Bench of
this Court in Kellogg Company (supra), however, she submits that there
ought to be compliance with the requirement of pre-deposit, and further
she states that all contentions of all parties will have to be explicitly
kept open for consideration by the Tribunal.
14. Accordingly, by adopting the same course of action as was
adopted in the case of Kellogg Company (supra), we dispose of these
petitions by allowing the Petitioner to institute appeals directly before
the Tribunal within three weeks from today, after complying with the
requirement of pre-deposit and other prescribed formalities. If such
appeals are indeed instituted, the Tribunal is directed to dispose of such
appeals on their own merits along with the other appeals without
adverting to the issue of limitation. Such a direction is consistent not
only with the directions in Kellogg Company (supra) but also M/s.
Mestra A. G. Switzerland (supra).
15. These Petitions are disposed of in the above terms by leaving
open all contentions of all parties on merits to the decision of the
Tribunal in the first instance. Needless to add that upon the institution
of the appeals within three weeks after making the pre-deposit, the
Respondent will not enforce their demands during the pendency of the
appeals before the Tribunal. Since the learned counsel for the Petitioner,
on instructions, stated that the appeals would be instituted within three
weeks after making the necessary pre-deposit, we direct that no
coercive action should be taken for enforcing the demand even during
this period of three weeks. However, if no appeals are instituted within
this period after making the necessary pre-deposit, the Respondent
would be at liberty to recover their demands in accordance with the
law.
Sayyed 905-WP.340.2025.docx
16. The Rule in these petitions is disposed of in the above terms
without any costs order. All concerned are to act on an authenticated
copy of this order.
(Jitendra Jain, J.) (M. S. Sonak, J.)
