The High Court of Sikkim has recently overturned a decision by the GST authorities to deny Zydus Wellness budgetary support of ₹59.44 lakh. The court ruled that the rejection was “untenable in law” and went against established judicial precedent. The GST authorities had rejected Zydus Wellness’ claim for budgetary support under the Scheme of Budgetary Support to Eligible Industrial Units in the North Eastern Region and Himalayan States, 2017. The Assistant Commissioner of Central Goods and Services Tax had concluded that the eligible support was “in the negative” and therefore, the company was not entitled to any benefit.
Zydus Wellness challenged this decision under Article 226 of the Constitution, arguing that the issue had already been settled by a Division Bench of the same High Court in a previous case, Glenmark Pharmaceuticals Limited v. Union of India (2024). In that case, the court had relied on a decision by the Jammu & Kashmir and Ladakh High Court, which clarified that budgetary support claims must be calculated on the basis of monthly tax payments through the cash ledger, rather than on a quarterly basis as interpreted by the authorities.
The High Court of Sikkim set aside the order dated 27 June 2022 passed by the Assistant Commissioner of CGST and directed that Zydus Wellness’ claim be reconsidered in line with the principles laid down in the Glenmark Pharmaceuticals and Coromandel International rulings. The court’s decision is a significant victory for Zydus Wellness, which will now be eligible to receive the budgetary support of ₹59.44 lakh.
The case, Zydus Wellness-Sikkim vs The Assistant Commissioner, was heard by Justice Meenakshi Madan Rai, who delivered the judgment on 11 August 2025. The counsel for the appellant, Mr. Mayank Jain, and the counsel for the respondent, Ms. Sangita Pradhan, presented their arguments in the case. The court’s decision has been cited as 2025 TAXSCAN (HC) 1725, and the case number is WP(C) No.10 of 2024. The ruling provides clarity on the calculation of budgetary support claims and will have implications for other companies operating in the North Eastern Region and Himalayan States.