M/S. Srichakra Milk Products LLP vs. Authority For Advance

Facts

M/s. Srichakra Milk Products LLP (Petitioner) filed a writ petition challenging the orders of the Authority for Advance Ruling (AAR) and the Appellate Authority for Advance Ruling (Appellate AAR). The AAR, in its order dated July 15, 2019, and the Appellate AAR, in its order dated December 9, 2019, had determined that flavoured milk falls under HSN Code 2202, making it taxable at 12% (6% CGST and 6% SGST). The Petitioner sought to quash these orders and declare that flavoured milk should be classified under HSN Code 0402 9990, taxable at 5% (2.5% CGST and 2.5% SGST), as per specific notifications. The petition was filed under Article 226 of the Constitution of India.

Held

The High Court of Andhra Pradesh disposed of the Writ Petition by following its own previous judgment. The Court referred to its decision in W.P.No.254 of 2024, dated December 10, 2024, which covered the issue raised in the present petition. Consequently, the present Writ Petition was disposed of in terms of the order passed in W.P.No.254 of 2024. The specific findings or reasoning from the earlier judgment were not detailed in this order, but the principle applied was that a prior binding precedent would govern the current case. The operative direction was to dispose of the petition in line with the earlier judgment, with no order as to costs.

Key Issues

1. Whether flavoured milk is classifiable under HSN Code 0402 9990 and consequently taxable at 5% (2.5% CGST and 2.5% SGST) as argued by the Petitioner, or under HSN Code 2202 and taxable at 12% (6% CGST and 6% SGST) as determined by the AAR and Appellate AAR. Contentions: Petitioner: Argued that flavoured milk, being a milk-based product, should be classified under HSN Code 0402 9990, which pertains to milk and cream, not concentrated or sweetened. They relied on Notification No. 1 of 2017-Central Tax Rate dated June 28, 2017, and Notification No. 1 of 2017 State Tax Rate in G.O.Ms.No.258 dated June 29, 2017, to support their claim for a 5% tax rate. Respondents: The judgment does not record specific arguments from the respondents. However, their position was upheld by the AAR and Appellate AAR, which classified flavoured milk under HSN Code 2202.