M/S. Foods And Inns LTD. vs. Union Of INDIA
Held
The Court held that the order passed by the Appellate Authority for Advance Ruling imposing GST on 'mango pulp' at 18% is incorrect. The Court relied on the Circular dated 03.08.2022, which clarified that 'mango pulp' falls under the category of 'all other forms of dried mango' and attracts GST at the rate of 12%. The reasoning is based on the explicit clarification provided in the Circular, which was issued subsequent to the AAAR's order. The Court found that the GST Council's recommendation, as reflected in the Circular, intended for mango pulp to be taxed at 12%. Therefore, the petitioner is liable to pay GST on mango pulp at 12%. The Writ Petition was disposed of with this clarification.
Facts
The petitioner filed a writ petition seeking a direction to classify goods manufactured by them as 'mango pulp' under Chapter Heading 0804 50 40 and exempt them from GST, or alternatively, to apply the correct GST rate. The petitioner had previously approached the Authority for Advance Ruling (AAR) and the Appellate Authority for Advance Ruling (AAAR) concerning the classification and GST rate applicable to mango pulp. Both the AAR and AAAR held that mango pulp falls under Tariff Item 0804 50 40 and attracts GST at 18% under Notification No. 1/2017-Central Tax (Rate). Subsequently, the Government of India issued a Circular dated 03.08.2022 clarifying the GST rates on various forms of mangoes.
Key Issues
1. Whether the classification of 'mango pulp' under Tariff Item 0804 50 40 and its chargeability to GST at 18% by the Appellate Authority for Advance Ruling is correct, in light of subsequent clarifications? Petitioner's Arguments: The petitioner contended that the GST rate applicable to mango pulp should be 12%, not 18%. They relied on the Circular dated 03.08.2022 issued by the Ministry of Finance, Department of Revenue (Tax Research Unit), which clarified that while fresh mangoes are exempt and mangoes sliced and dried attract 5% GST, all other forms of dried mango, including mango pulp, attract GST at the rate of 12%. Revenue/State's Arguments: The judgment does not record any specific arguments made by the revenue or state authorities in response to the petitioner's contentions regarding the Circular. The authorities had previously passed orders classifying mango pulp at 18% GST.
Sections Cited
Notification No.2/2017-CT(Rate), Notification No.1/2017-Central Tax (Rate), Notification No. 6/2022-Central Tax (Rate)
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THE HONOURABLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HONOURABLE SRI JUSTICE A.V.RAVINDRA BABU
WRIT PETITION No.17267 of 2022
ORDER:- (Per Hon’ble Sri Justice C.Praveen Kumar)
Heard Sri Mahesh Rai Chanda Nai, learned counsel representing Sri G. Arun Showri, learned counsel for the petitioner, Sri Y.N. Vivekananda, learned Government Pleader for Commercial Taxes appearing for respondents 2,5 & 6, and Sri Suresh Kumar Routhu, learned standing counsel appearing for respondents 3 & 4. Perused the record.
The present writ petition came to be filed under Article 226 of the Constitution of India seeking issuance of a Writ of Mandamus directing the respondents 5 & 6 to declare the goods manufactured by the petitioner as classifiable under Chapter Heading 0804 50 40 and exempt from GST in terms of entry 51 of Notification No.2/2017-CT(Rate) dated 28.06.2017, apart from other reliefs.
As seen from the record, by an order dated 27.07.2022, this Court, taking into consideration the submissions made across the Bar, directed the respondents herein not to take any coercive steps for recovery of GST @ 18% as contemplated by
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