GST Dispute Over Taxation of DDGS, DWGS, and ENA Products Escalates with Notice and Alternative Service Directions

HC issued notice in a GST taxation dispute involving DDGS, DWGS, and ENA. The court directed respondents to file an affidavit-in-reply by 22.12.2022, permitted the petitioner to seek adjournment for the 16.12.2022 hearing, and allowed alternative service through e-mode. The case centers on challenging the taxability of specific alcoholic and feed-related products under GST regulations.

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Issues:
Taxability of Dried Distillers Grains Solubles (DDGS), Distillers Wet Grains Solubles (DWGS), and Undenatured Extra Neutral Alcohol (ENA) under GST laws challenged in light of CBI Circular No.163/19/2021-GST and actions of respondent No.3.

Analysis:
The petitioner, a private limited company engaged in the manufacture and sale of alcoholic beverages and cattle feeds, challenges the taxability of DDGS, DWGS, and ENA under GST laws. The controversy arises from the CBI Circular No.163/19/2021-GST dated 06.10.2021 and the actions of respondent No.3, which the petitioner claims are contrary to the agreed status quo regarding ENA taxation until the final recommendation of the GST Council. The petitioner seeks various declarations, including the ultra vires nature of the circular, correct classification of DDGS/DWGS, and the alleged double taxation on ENA already subjected to VAT. The petitioner also requests writs of certiorari and mandamus to quash the circular and related notices and direct the concerned authorities to withdraw them.

The High Court notes the petitioner's arguments regarding the pending consideration of ENA taxability by the GST Council, emphasizing the potential nationwide impact of any premature adjudication on the issue. The Court is informed that the last council meeting discussed the taxability of ENA, with the next meeting scheduled for 17.12.2022. The petitioner asserts that the impugned circular goes against statutory classification schemes and could influence all pending taxability issues. The senior advocate for the petitioner highlights the upcoming hearing date of 16.12.2022 before the concerned officer, who is reluctant to grant further adjournments.

In response to the arguments presented, the High Court issues a notice returnable on 22.12.2022, directing the respondent to file an affidavit-in-reply. The petitioner is permitted to seek an adjournment for the hearing on 16.12.2022, with the officer concerned instructed to consider such requests. Additionally, the Court allows direct service through e-mode on the official email address apart from the regular mode of service. The case is set for further proceedings based on the submissions and arguments made by the parties involved.

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