The Karnataka High Court on 24 September held that an appeal against an order of a Customs, Excise & Service Tax Appellate Tribunal (CESTAT) on the classification and taxability of services as “Goods Transport Agency” (GTA) service lies before the Supreme Court under Section 35L of the Central Excise Act, 1944, and not before the High Court under Section 35G.

A Division Bench comprising Justices R. Devdas and K. Manmadha Rao dismissed the Central Excise Appeal filed by the Commissioner of Central Tax, Bengaluru North, against the CESTAT order dated 23 April 2025 concerning Spoton Logistics Pvt. Ltd. The judges held:

“...It is therefore clear that the issue decided by CESTAT clearly touches upon the determination of a question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment and therefore, the same falls within the 'exclusion' provided in Section 35G and clause (ii) of sub-section (1) of Section 35L as clarified in sub-section (2) of Section 35L, within the purview of the Hon'ble Supreme Court.”

The dispute concerned whether the services provided by Spoton Logistics were classifiable as GTA services and consequently liable to service tax under the Reverse Charge Mechanism.

The Revenue contended that the appeal was maintainable before the High Court under Section 35G, as the CESTAT had examined whether the services provided by Spoton Logistics fell under the GTA category. It submitted that Spoton Logistics did not satisfy the requirements of providing services relating to transportation of goods by road and issuing consignment notes.

Spoton Logistics, however, contended that the appeal was not maintainable before the High Court and that the Revenue would have to approach the Supreme Court under Section 35L.

The High Court relied on the Supreme Court's judgment in M/s Alupro Building Systems Pvt. Ltd. v. Commissioner of Central Excise, Bangalore-II, 2026 INSC 582, which examined the scope of Sections 35G and 35L of the Central Excise Act.

The Supreme Court held that questions relating to taxability or excisability for the purpose of assessment fall within the scope of Section 35L and are excluded from the jurisdiction of the High Court under Section 35G.

Applying this principle, the High Court noted that the CESTAT had examined the nature of the services provided by Spoton Logistics, the agreement between the parties, line haul and pick-up and delivery charges, and the issuance of consignment notes.

The CESTAT had found that Spoton Logistics did not satisfy the requirements for classification as a GTA service, as it did not provide services in relation to transportation of goods by road and did not issue consignment notes.

The High Court held that the issue decided by the CESTAT concerned classification and excisability and therefore fell within the scope of Section 35L. It held:

“...The issue is one of classification and excisability. The issue squarely falls within the bracketed portion of sub-section (1) of Section 35G and sub-clause (b) of sub-section (1) of Section 35L and sub-section (2) of Section 35L of the Act, 1944. The appeal is therefore not maintainable before this Court. The appellant will have to approach the Hon'ble Supreme Court invoking Section 35L of the Act, 1944.”

Accordingly, the Division Bench dismissed the appeal, while reserving liberty to the Revenue to approach the Supreme Court under Section 35L of the Central Excise Act.

For Appellant: Central Government Senior Panel Counsel M. Unnikrishnan

For Respondent: Advocate Onkar Sharma, for Advocate V.J. Achalanand

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Case Title :  The Commissioner of Central Tax Bengaluru North v. Spoton Logistics Private LimitedCase Number :  CENTRAL EXCISE APPEAL NO. 1 OF 2026CITATION :  2026 LLBiz HC(KAR) 175
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