2023 (1) TMI 1167 - HC - GST

Supreme Court Affirms 12% Tax Rate for PPSB Bed Sheets, Defers to Technical Experts on Product Classification

M/s. Harsh Polyfabric Pvt. Ltd. Versus Union Of India And Ors.

The SC upheld the Appellate Authority's classification of PPSB bed sheet under Chapter 56 to 62, taxing it at 12%. The Court declined to intervene in ... Seeking adjudication by this Writ Court under Article 226 of the Constitution of India - classification of the Customs & Central Excise Tariff Act its product and declaration to this effect - Nonwoven Fabric - PSB Bed Sheet manufactured of non-woven fabric - HELD THAT:- This Writ Court in exercise of its Constitution Writ Jurisdiction under Article 226 of the Constitution of India should not act as an expertise to scrutinise the composition and mode of manufacture of a product like of this nature and do the job of classifying a product as to under which classification list of the Customs Tariff Act such product falls since it requires scientific and technical analysis to be conducted by expertise in such scientific and technical field. In exercise of Constitutional Writ Jurisdiction under Article 226 of the Constitution of India Writ Court should not scrutinise an adjudicating authority’s decision itself, by acting as an appellate authority over such order of the authority and substitute the findings of an authority by reappreciating the evidence and material and more particularly the nature of a case like this. This is not a case where any violation of principles of natural justice has been committed or any procedural irregularity has been committed by the authority in passing the impugned order or violation of any specific statutory provision of law has been committed by the Appellate Authority concerned in passing the impugned order. Petition dismissed. Issues: Classification of goods under Customs & Central Excise Tariff Act for taxation purposes.The petitioner challenged an order by the Appellate Authority under the West Bengal Goods and Services Tax Act and Rules, 2017. The main issue was the classification of the petitioner's product under the Customs & Central Excise Tariff Act. The petitioner claimed its product, PPSB bed sheet, should be classified under Chapter 63 with HSN Code 63041930. However, the Appellate Authority held that the product falls under Chapter 56 to 62 and should be taxed at 12%. The Authority considered the non-woven fabric and PPSB bed sheet as the same textile fabric. The Court emphasized that determining the classification requires scientific and technical expertise, which the Court lacks. It stated that it should not act as an appellate authority over the classification decision. The Court highlighted that only scientific and technical experts can analyze the material used and the manufacturing process to determine the correct classification under the law. The Court found no violation of natural justice or procedural irregularity in the Authority's decision. Consequently, the writ petition was dismissed, but the petitioner was granted liberty to raise the issues before the Appellate forum or Tribunal in the future.