TaxTMI 
TaxTMI 
2024 (2) TMI 350
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....which are exempt falling under HSN Code from 2309 without any discussion about the various judgments cited before him as arbitrary, unjust without jurisdiction contrary to law and illegal and consequently set aside the same and pass such other order or orders as deemed fit and proper in the circumstances of the case and in the interests of justice." 2. The petitioner's case succinctly is thus: (a) The petitioner is a registered tax payer under the GST Act, 2017 engaged in the business of manufacture and sale of Prawn Feed and Health Care Products of Shrimp. Prawn feed with HSN Code number 2309 is exempted from tax under the GST laws. Accordingly, the petitioner reported the sales of prawn feed sold by it in its returns and claimed exemption on the same. (b) The 1st respondent conducted inspection of the business premises of petitioner on 11.11.2022 and thereafter issued intimation in Form GST-01A dated 23.11.2022 and after obtaining the reply dated 06.12.2022 from the petitioner, issued show cause notice dated 09.12.2022 stating therein that the products "Bio Pro-Enhac" and "Minwa and Minwa plus" sold by the petitioner fall under HSN code 2936 and 2931 respecti....
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....these factual and technical aspects in correct lines, the 1st respondent passed the impugned Assessment Order. Hence, the writ petition. 3. The 1st respondent filed counter and opposed the writ petition. (a) After following due procedure, the impugned Assessment Order dated 07.02.2023 was passed and as the petitioner has an efficacious alternative remedy under the statute which he has not availed, the writ petition is liable to be dismissed. (b) The products sold by the petitioner purportedly as prawn feed supply are neither covered under HSN code 2309 nor are they exempted from tax as they do not fall under the category of aquatic feed or feed supplements that are consumed by the shrimps. The products imported from China by the petitioner cannot be exempted for the following reasons. (i) Bio pro-enhac contains both natural and chemical elements that assists in the improvement of water quality, soil quality, immunity and overall health of the shrimp which falls under HSN code 2936 i.e., "Pro vitamins and vitamins, natural or reproduced by synthesis (including natural concentrates), derivatives thereof used primarily as vitamins and inter-mixtures of....
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....e impugned order and hence, the writ petition is not maintainable. The respondents thus prayed to dismiss the writ petition. 4. Heard arguments of Sri S.Ravi, Senior Counsel representing Sri G.Narendra Chetty, counsel for petitioner, and learned Government Pleader for Commercial Taxes representing the respondents. 5. The bone of contention in this case is to the taxability of two products i.e., "Bio pro-enhac" and "Minwa and Minwa plus" manufactured by the petitioner under the GST regime. The petitioner is a registered taxpayer under the GST Act, 2017 and it is engaged in manufacture and sale of prawn feed and health care products of shrimp. The petitioner is allocated to central jurisdiction. The petitioner's case is that his two products viz., "Bio pro-enhac" and "Minwa and Minwa plus" come under HSN code 2309 and exempted from tax under the GST Act, 2017 and therefore, the petitioner reported sales of prawn feed in its returns and claimed exemption. (a) Learned Senior Counsel Sri S.Ravi would argue that one variety of shrimp feed is called "Bio pro-enhac" and it is having the same elements that are used to manufacture shrimp feed including calcium, propionate, fis....
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....t that the two products are not exempted under the HSN code 2309 but they fall under HSN code 2936 and 2931 respectively and hence, liable for tax at 18% under the GST Act. 6. Per contra, learned Government Pleader for Commercial Tax argued that the product "Bio pro-enhac" is concerned, it contains compound amino acids, biological metabolites and fermentation flavors, promotes digestion, raises food take and also promote feed conversion of shrimp. It also enhances the shrimp immunity and healing process. Therefore, "Bio pro-enhac" is a product covered by HSN 2936 pro-vitamins and vitamins, natural or reproduced by synthesis (including natural concentrates), derivates thereof used primarily as vitamins and inter-mixtures of the foregoing and therefore, attracts tax at 18% and the said product will not fall under HSN 2309 but comes under 2936. (a) He further argued that so far as the product Minwa and Minwa plus is concerned, it contains calcium, magnesium, potassium, phosphorous, aluminum and strontium. These products stabilize alkalinity and controls PH fluctuation in water. He argued that the term "PH" is the level of acidity or alkalinity in water. This is a factor th....
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....tamins and pro-vitamins which are medicinal in nature and have much higher concentration of active substance, whereas HSN code 2931 covers "other organo-inorganic compounds" under GST Act, 2017. (a) When the impugned order is perused, so far as the product "Minwa and Minwa plus" is concerned, in the impugned order it is stated that Minwa and Minwa plus contains calcium, magnesium, potassium, phosphorous, aluminum and strontium and this product i.e., Minwa and Minwa plus stabilize alkalinity and control PH fluctuations in water. The impugned order contains a vivid narration about PH value in water and requirement of maintenance of its level in a shrimp pond. Such description is mentioned under the heading "importance of PH value in shrimp farming". It is stated thus: "The pH is the level of acidity or alkalinity in water. This is a factor that affects the health of the Shrimp growing in the pond. The pH scale ranges from 0 to 14. Numbers below seven indicate high acidity. Similarly, numbers above seven indicate high alkalinity. Similarly, the number seven indicates a neutral state. pH of the water in a Shrimp Pond should be maintained between seven and eig....
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.... intensifies release of buffering fluids, containing enzymes, from the hepatopancreas in shrimp pond. The main usage of calcium, Aluminium, magnesium and potassium in shrimp farming is to control pH value in Shrimp Pond. The water with low and high pH value can be corrected by adding chemicals and fertilizers in Shrimp pond." (b) In the impugned order, the 1st respondent has stated that the main usage of the product Minswa and Minwa plus is to control the PH value of the shrimp pond and it is directly poured in pond. It contains organic and inorganic compounds such as calcium, aluminum, magnesium and potassium which are used to control the PH value in water. It is also stated that fertilizers and chemicals are used to stabilize alkalinity and control PH fluctuations in water. The 1st respondent thus came to conclusion that the Minwa and Minwa plus falls under schedule III Sl.No.40 and Chapter Heading 29 with description of goods "All organic chemicals" and the rate of tax thus applicable is 18% for HSN code 2931 i.e., other organo-inorganic compounds in GST Act, 2017. The 1st respondent observed that though the petitioner claimed that the product Minwa and Minwa p....
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.... by the Bombay High Court. No doubt it was contended on behalf of the Revenue that the contrary view taken by the Tribunal has been challenged in this Court which was rejected in limine at the admission stage. We do not think that that dismissal at the admission stage can be relied upon as a binding precedent. Even assuming that there are two views possible, it is well settled, that one favourable to the assessee in matters of taxation has to be preferred." Be that as it may, the grievance of the petitioner is that while dealing with the issue as to whether the product "bio pro-enhac" is a supplement to the shrimp feed and thus exempted from tax, the 1st respondent has not correctly dealt with the ratio in the Sun Export Corporation (1 supra). In this context, we have perused the impugned order. The discussion and conclusion on bio pro-enhac are as under: "Biopro Enhac: Discussion: BioproEnhac contains the elements Soya bean meal, wheat bran, corn meal, Bacillus subtills, Microzyme, Saccharfying enzyme, Xylanase, Cellulase Calcium propionate,Fish Meal and Dextorse. Bio Pro Enhac contains both natural and chemical elements which mainly improve immunity,....