Dismissal of GST Liability Challenge on Rice Sales with Trademark Post 22.09.2017

The High Court dismissed the petition challenging the Assistant Commissioner of CGST's order holding the petitioner liable for Central and State GST on sales of rice with a registered trademark post 22.09.2017. The Court emphasized the need to exhaust statutory appeal mechanisms before approaching the High Court directly, noting that factual disputes should be examined by the appellate authority. The Court also highlighted the importance of allowing cross-examination in departmental proceedings but left this issue for the appellate authority to determine. The petition was dismissed, with the Court directing the appellate forum to entertain the appeal on merits if filed within two weeks.

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Issues:
Challenge to order by Assistant Commissioner of CGST regarding non-payment of GST on sale of rice with registered trademark.

Analysis:
1. The petitioner, a company engaged in manufacturing and supplying rice, challenged an order by the Assistant Commissioner of CGST alleging evasion of GST on the sale of rice with registered trademark.

2. The department contended that the petitioner had not paid GST on the sale of rice with registered trademark post 22.09.2017, leading to a show-cause notice demanding payment of unpaid GST on seized rice stock and subsequent sales.

3. The petitioner argued that pre-22.09.2017, rice supply did not attract GST, and post that date, they were not engaged in selling rice with registered trademark, disputing the department's claims regarding the seized stock and marked rice bags.

4. The adjudicating authority found the petitioner liable for Central and State GST on sales of rice with registered trademark post 22.09.2017, confirming the tax demand with interest and penalty, offering a reduced penalty if the tax demand was accepted.

5. The High Court declined to entertain the petition due to the availability of an alternative statutory appeal against the order. It emphasized the need to exhaust appeal mechanisms before approaching the High Court directly, citing precedents and the appeal route through the GST Tribunal.

6. The High Court noted that the petitioner raised factual disputes about their activities post-22.09.2017, emphasizing that such disputed facts should be examined by the appellate authority, not the Court in a writ petition.

7. The order by the adjudicating authority was deemed detailed and speaking, addressing the department's case, petitioner's contentions, and providing reasons for the conclusions, making it non-critiquable for lack of reasoning.

8. The petitioner's plea regarding cross-examination of witnesses was considered, with the Court highlighting the necessity of allowing cross-examination in departmental proceedings. However, it stated that this issue should be examined by the appellate authority to determine its impact on the order.

9. The petition was dismissed, but the Court clarified that the appellate forum should entertain the appeal on merits if filed within two weeks, without considering any observations made in the dismissal order.

10. Any pending applications were also disposed of as per the Court's ruling.

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