Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH THURSDAY, THE 7TH DAY OF SEPTEMBER 2023 / 16TH BHADRA, 1945 WP(C) NO. 28372 OF 2023 PETITIONER:
ATLANTIC CARE CHEMICALS PVT. LTD AGED 52 YEARS PLOT NO.VI/666 B & C, BUILDING NO.XV/455-A, INDUSTRIAL DEVELOPMENT PLOT, VADACKAL P.O, ALAPPUZHA., 688 003 REPRESENTED BY DR. RAVICHANDRAN.L, DIRECTOR) BY ADVS.
K.N.SREEKUMARAN P.J.ANILKUMAR (A-1768) N.SANTHOSHKUMAR RESPONDENTS:
1 SUPERINTENDENT CENTRAL TAX AND CENTRAL EXCISE, ALAPPUZHA RANGE, CHANDRA SQUARE, CULLON ROAD, ALAPPUZHA, PIN – 688 011.
2 ASSISTANT COMMISSIONER OF CGST & CENTRAL EXCISE ALAPPUZHA DIVISION, CHANDRA SQUARE, CULLON ROAD, ALAPPUZHA, PIN – 688 011.
3 COMMISSIONER CGST & CENTRAL EXCISE, CUSTOMS AND SERVICE TAX ICE BHAVAN, PRESS CLUB ROAD, THIRUVANANTHAPURAM, PIN – 695 001.
OTHER PRESENT:
SREELAL WARRIOR-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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DINESH KUMAR SINGH, J.
-------------------------------------------- W.P.(C) No.28372 of 2023 -------------------------------------------- Dated this the 07th day of September, 2023 J U D G M E N T 1.
Heard Mr.K.N.Sreekumaran, learned Counsel for the petitioner and Mr.Sreelal N. Warrier, learned Standing Counsel for the respondents.
2.
The petitioner has approached this Court aggrieved by the order imposing penalties for offence alleged under Section 74(9) read with Section 122(2)(b), 122(1)(i) and 125 of the Central Goods and Service Tax Act issued by the 1st respondent.
3.
During the assessment period from April 2020 to June 2021, the petitioner manufactured hand sanitizers and classified under the Tariff heading 30049088 of HSN and declared tax liability @ 12% applicable to medicament and paid tax as per the returns filed under the Goods and Service Tax Act.
4.
It appears that the return filed by the petitioner
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got accepted by the 1st respondent, jurisdictional CGST authority. However, later on 05.07.2022 the 1st respondent initiated action under Section 74(1) of the GST Act by issuing a show cause notice to the petitioner. As per Ext.P2 the classification is under Hand Sanitizers (alcohol based) under HSN 3808 exigible to GST @ 18%. In pursuant to the said notice, the order in original dated 24.07.2023 was passed. The petitioner had paid the assessed amount along with the interest in pursuant to the said order. The petitioner is not disputing the said liability, he is only aggrieved by the initiation of the penalty proceedings.
5.
The learned Counsel for the petitioner submits that whether the Hand Sanitizers were liable to be taxed at 12% or at 18% was not finally decided. The 1st respondent had accepted the return filed by the petitioner. The issue involved is of classification and a debatable issue. The petitioner had not evaded the tax and, therefore, initiation of the penalty proceedings for tax is unjustifiable.
6.
It is further submitted that, as per the Judgment of this Court in the case Chakkiath Brothers v. Assistant
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Commissioner [2014 (3) KLT 222], on the basis of a mere dispute in classification, no penalty proceedings can be initiated. In the present case also there is a dispute of classification. In the impugned order the authority had not considered the judgment of this Court in the case Chakkiath Brothers v. Assistant Commissioner (supra).
7.
In view of the above, I find that the matter needs to be remanded back to the 1st respondent for passing a fresh order in accordance with law, after taking into consideration the Judgment in the case Chakkiath Brothers v. Assistant Commissioner (supra).
8.
Therefore, the present writ petition is allowed and the impugned order is set aside. The matter is remanded back to the file of the 1st respondent to decide the penalty proceedings after taking into consideration of the Judgment of this Court in the case Chakkiath Brothers v. Assistant Commissioner (supra).
Sd/- DINESH KUMAR SINGH JUDGE rpr
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APPENDIX OF WP(C) 28372/2023 PETITIONER’S EXHIBITS Exhibit 1 TRUE COPY OF ONE SAMPLE INVOICE BEARING NO.R120210977 DATED 30.11.2020 KEPT BY THE PETITIONER.
Exhibit-P2 TRUE COPY OF THE NOTICE NO.01/2022-23 GST (SUPDT) WITH DIN 20220758TH01002202D2 DATED 5.7.2022 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER.
Exhibit-P3 TRUE COPY OF THE REPLY DATED 12.08.2022 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT.
Exhibit-P4 TRUE COPY OF THE ORDER IN FORM GST DRC-07 NO.06/2023-24/GST 24.07.2023 UNDER DIN- 20230758TH0100444EA4 PASSED BY THE 1ST RESPONDENT.
Exhibit-P5 TRUE COPY OF THE RELEVANT ELECTRONIC LIABILITY LEDGER AS ON 11.8.2023 EVIDENCING PAYMENT OF TAX AND INTEREST DOWNLOADED FROM GST PORTAL.