BENGALURU: The High Court struck down the Health Security se National Security Cess Act, 2025, and the rules levying the cess, saying it is unconstitutional, as the levy is based on the assumption of quantity manufactured instead of actual quantity manufactured.
The Act failed the tenets of Article 14 of the Constitution, and to that extent the Act is unconstitutional. Therefore, notifications dated December 16 and 31, 2025, and January 1 and 30, 2026, issued to levy cess, are contrary to law and accordingly quashed, the court said.
Rejecting the contention of the pan masala manufacturers that the Parliament lacked the legislative competence to enact a law for imposition of the tax, surcharge or cess, the court said striking down the Act will not stop the Union government to bring in the enactment, bearing in mind the observations made in the court in the order.
Justice M Nagaprasanna pronounced the order recently while partly allowing a batch of petitions filed by M/s Dhariwal Industries Pvt. Ltd., challenging the constitutional validity of the legislation enacted to provide for levy and collection of cess to meet expenditure on national security and public health, which came into force in February.