TaxTMI 
TaxTMI 
2024 (5) TMI 266
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.... narrow compass, both the petitions are taken up for hearing. For the sake of convenience, Special Civil Application No. 21700 of 2022 is treated as the lead matter. [6] The petitioner supplies "mango pulp" to 100% Export Oriented Unit which further exports such pulp outside the country after minor processing / re-packing. [7] The petitioners are duly registered under the provisions of the Central Goods and Services Tax Act, 2017 (for short, "the GST Act"). When the GST regime was implemented with effect from 1^st July 2017, fresh mangoes were listed in the exemption Notification No. 2/2017, while dried mangoes were listed in the Notification No. 1/2017 in Schedule - II, for which rate of tax was 12% (6% CGST + 6% SGST). [8] The Notifications regarding rates of tax in respect of goods as well as exemption are based on Harmonized System of Nomenclature (HSN) as notified by the World Customs Organization. Each entry has the corresponding HSN mentioned against it. The Heading for mangoes in HSN (HS Code 0804) segregates them into only two broad categories: (1) fresh and (2) dried. [9] In the 22nd GST Council Meeting held on 6th October 2017, it was decide....
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....h September 2022 raising objections that "mango pulp" would not be covered by the residuary entry attracting 18% tax rate as there are only two types of mangoes covered under HSN 0804; one is fresh and another is dried and therefore, fresh mangoes would be covered under the exemption Notification No. 2/2017 and dried mangoes would be covered by the Schedule of 5% and apart from the dried mangoes "mango sliced" is also mentioned in the Rate Schedule of 5%. The petitioners have, therefore, paid tax at the rate of 5% under the GST Act. [16] As the respondent authorities were not willing to drop the proceedings in view of circular dated 3rd August 2022, the petitioners have prayed for the following reliefs: "29A. This Hon'ble Court may be pleased to strike down and declare para 4 of Circular No. 179/11/2022-GST dated 3.8.2022 issued under Section 168 of the CGST Act to be ultra-vires Section 9 of the CGST Act read with Entry No. 30A of Schedule I of Notification No. 1/2017-Central Tax (Rate) dated 28.6.2017 as well as Entry No. 51 of Notification No. 2/2017-Central Tax (Rate) dated 28.6.2017 as well as manifestly arbitrary and violating Article 14 of the Constitution of Ind....
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....e considered as retrospective applying rate of 12% from beginning. It was submitted that delegated legislation cannot be retrospective unless parent legislation gives express power to make amendment with retrospective effect. In this regard, reliance was placed upon the the following decisions of the Hon'ble Supreme Court: (a) Bakul Cashew Co and others vs. Sales Tax Officer reported in 1986 (2) SCC 365 (b) Cannanore Spinning and Weaving Mills Ltd vs. Commissioner of Customs and Central Excise reported in 1969 (3) SCC 112 [17.3] It was submitted that the GST tariff is based on Harmonized System of Nomenclature which bifurcated mangoes falling under HSN 0804 into two categories: fresh and dried. It was submitted that with specific rates being prescribed for both such categories, reference cannot be made to residuary entry as is sought to be done by the respondents. It was submitted that proposition that HSN needs to be followed when tariff is based on HSN code is no more res integra. Reliance was made upon the following decisions of the Hon'ble Supreme Court: (a) Collector of Central Excise vs. Woodcraft Products Ltd reported in 1995 (77) ELT 23 (SC) ....
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....nnot recover the GST at the rate of 18% applying the residuary category. Reference was also made to the decision of the Hon'ble Supreme Court in the case of Vatika Township Private Limited (supra), to submit that the Hon'ble Supreme Court has laid down the general principle concerning retrospectivity in the said decision and has held that substantive provision is to be construed as prospective in operation. [17.9] Learned advocate Mr. Sheth also placed reliance on the decision of the Hon'ble Supreme Court in the case of Essar Teleholdings Limited (supra), wherein the Hon'ble Supreme Court held that ordinarily, a subordinate legislation should not be construed to be retrospective in operation unless there are clear indications to the same. [18] On the other hand, learned advocate Ms. Hetvi Sancheti for the respondents submitted that "mango pulp" was not classified anywhere and therefore, the tax is leviable under residuary entry No. 453 at 18%. Reliance was placed on the averments made in the affidavit-in-reply filed on behalf of the respondents Nos. 1, 2 and 3: "8. W.r.t. to para 15 and 16, it is stated that GST Council is the Constitutional body to decide issues rel....
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....hall be inserted, namely 304 0804 Mangoes sliced, dried" (iii) In Schedule II-12% - (i) In S. No. 16, in column (3), for the words and brackets 'Dates (soft or hard), figs, pineapples, avocados, guavas, mangoes and mangosteens, dried, the words and brackets, "Dates (soft or hard), figs, pineapples, avocados, guavas and mangosteens, dried", shall be substituted. The above amended notification reveals that Mangoes sliced, dried are taxable @ 5% while it in silent on "'mango Pulp'. As there is no specific description of "mango pulp/puree", under GST tariff notification, entry no. 453 of Schedule - III of Notification No. 1/2017-Central Tax (Rate) dt: 28.06.2017 is applicable. which is a residuary entry covering goods which are bot specified in Schedules I, II, IV, V, VI of the Notification, attracting the tax rate of 18%. 9. W.r.t to Para 17, this is a policy matter therefore no commentsare being offered. 10. W.r.t. para - 18, it is pertinent to note that the Explanation to the Rate Notification No. 1/2017-Central Tax (Rate) dt: 28.06.2017 reads as under: "For this Notification:... (ii) "Tariff item", "sub-heading" "heading" an....
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....les, with different tax rates in the tariff notification. (iv) Entry No. 51 of 0804 of notification No. 1/2017-Central Tax (Rate) dated 28th June 2017 as 08/2017-Central Tax (Rate) dt: 28.06.2017 is applicable, which is a residuary entry covering goods which are not specified in Schedules I, II, IV, V, VI of the Notification, attracting the tax rate of 18%. 11. W.r.t to Para-19, and 20, it is stated that notices issued to the petitioners were according to the law and provisions as stated herein above. 12. W.r.t to Para 21 and 22, it is stated that the notification has been issued in exercise of the powers conferred by sub-section (1) of section 9 and sub-section (5) of section 15 of the Central Goods and Services Tax Act, 2017 (12 of 2017), by the Central Government on the recommendation of the GST council. Therefore, no comments are being offered. 13. W.r.t. to Para 24, it stated that the clarification sought is the information provided by the CBIC Mitra helpdesk. CBIC Mitra helpdesk is the Central helpline for grievance redressal and information system of Central Board of Excise and Customs, Ministry of Finance, Government of India. It is perti....
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....f tax applicable to the product (mango pulp) supplied by the petitioners to 100% Export Oriented Unit, which, in turn, export the same to such party outside the country after minor processing / re-packing, and in view of the various amendments made in the rate of GST from time to time, by issuance of Notifications by the respondents authorities, it would be futile exercise to send back the petitioners for adjudication process of the issue as the respondent authority has issued notice on the basis of charging 18% GST prior to 18th July 2022 on the ground that "mango pulp" is not classified anywhere and therefore, 18% rate for the residuary entry No. 453 is required to be charged. [20] Section 9(1) of the CGST Act, which is a charging section, provides for levy and collection of the GST as per the rate of tax to be notified by the Government on the recommendations of the Council. Section 9(1) reads as under: "9. Levy and collection.- (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, ....
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....des fruits, pulps. According to the petitioners, "mango pulp" was nothing, but pulp form of sliced mango. The petitioners therefore considered "mango pulp" as per the Entry 30A of Schedule - II and paid 5% GST on supply of "mango pulp". [26] Even the CBIC Mitra Helpdesk, in the E-mail dated 19th February 2018, has confirmed that for "mango pulp", GST rate is 5%. [27] The GST Council in its 47th meeting clarified that there was a third category of mangoes in HSN 0804 other than fresh and dried mangoes and that such mangoes were always intended to be taxed at the rate of 12%. Accordingly, Entry no. 16 in Schedule II was introduced by Notification No. 6/2022 dated 13th July 2022 as "mangoes other than mangoes sliced, dried". [28] The CBIC has issued impugned circular dated 3rd August 2022 and para 4 of the said circular reads as under: "4. Mangoes under CTH 0804 including mango pulp, but other than fresh mangoes and sliced, dried mangoes, attract GST at 12% rate: 4.1. Representations have been received seeking clarification regarding the applicable GST rate on different forms of Mangoes including Mango Pulp. 4.2. On the basis of the recommendation o....
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....he GST Council, which reads as under: "4. The GST rate on all forms of mango under CTH 0804, including mango pulp (other than mangoes sliced, dried) attract GST at the 12%. Entry is also being amended to make this amply clear. Raw or fresh mangoes continue to be exempt." [31] Considering the above, it is clear that prior to the 22nd meeting of the GST Council, so far as mango sliced and dried are concerned, the GST rate was applicable at 12% from 1st July 2017 as per Notification No. 1/2017 in Schedule - II which was reduced to 5% as per recommendations of the GST Council as per Notification No. 34/2017 dated 13th October 2017. While the GST Council in its 47th meeting has clarified that only mangoes sliced and dried are liable to reduction of rate of tax at the rate of 5% from 12% and therefore, to clarify that mangoes other than sliced and dried, the third category of entry was inserted in the category vide Entry No. 16 of Schedule - II as per Notification No. 6/2022 dated 18th July 2022. Therefore, for all purposes and intention Entry of rate of 12% would govern the product "mango pulp", which was not specifically included in Entry No. 30A, which provides for mango s....
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....tification No. 1/2017 and the petitioner would not be entitled to have the benefit of reduced rate of GST from 12% to 5%, as claimed in these petitions for the interregnum period from 01.07.2017 to 18.07.2022. [36] In view of the above, it would not be necessary to refer to the various decisions relied upon by the petitioners on the ground of retrospectivity and/or the principle of promissory estoppel. The petitioners are not covered by the Entry "mango pulp" or "mango sliced, dried" but the petitioners are covered by the third category of mangoes other than sliced and dried, which would attract 12% GST which is clarified as per Entry No. 16. [37] The contention of the petitioners is that in absence of Entry No. 16, the petitioners cannot be charged with GST at 12%, which is also not tenable because from 1st July 2012 to 12th October 2017 the petitioners were liable to pay GST at the rate of 12% on mango pulp. [38] Therefore, the case of the petitioners that word "mango" was removed from Entry No. 16, the petitioners would be liable to pay tax at 5% on mango sliced and dried as the "mango pulp" is neither mangosteens nor dried as per Serial No. 16 in Schedule - II under Ch....
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.... August 2022, there was a amendment in Entry No. 16 to include product like "mango pulp" attracting GST at the rate of 12% with effect only from 18th July 2022 as such substitution by the Notification No. 6/2022 is only by way of clarification to apply the GST at 12% on all types of dried mangoes i.e. mangoes (other than mangoes sliced and dried). [42] In other words, the GST Council has clarified in its 47th meeting that tax rate would continue to apply at 12% other than "mango sliced, dried" for which the GST rate was reduced to 5% as per the recommendations of 27th meeting of the GST Council. [43] The petitioner is, therefore, liable to pay GST at the rate of 12% as per Entry no. 16 from 01.07.2017 and not 5% as per Entry No. 30A, which provides for "mangoes sliced, dried" only. The contention of the petitioners that there was an amendment to the rate Notification with effect from 18th July 2022 is not tenable. As such the Notification is only clarificatory and would apply with effect from 1st July 2017 as per Notification No. 1/2017. It is true that Section 9 of the CGST Act does not grant power to amend the rate Notification. However, in the facts of the case, as analyze....