2024 (12) TMI 1078

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....pondent (UBL). He submitted that the impugned show cause notice, notwithstanding the terminology used therein, proposes a tax on the supply of alcoholic liquor for human consumption. He further submitted that both under Section 9 (1) of the Central Goods and Services Tax Act, 2017 ("CGST Act 2017") and the Constitutional Scheme, no CGST or IGST could be levied on the sale of alcoholic liquor for human consumption by any authority other than the State Authority. Accordingly, he submitted that the impugned show cause notice is ex-facie without jurisdiction, being beyond the legislative and, consequently, the executive competence of the Central Government. 4. Mr. Nankani submitted that the Authority for Advance Ruling, in the matter of United Breweries Limited 2018 (18) G.S.T.L. 855 has ruled that the amounts earned and retained by bottlers such as the Petitioner herein are not liable to GST. He submitted that though this Advance Ruling was at the behest of UBL, since the Petitioner functions under a licence agreement from UBL, even the Petitioner is entitled to the benefit of this Advance Ruling. He submitted that such Advance Ruling binds the Respondents, and the issuance of the im....

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....erhead charges received from the Brand Owner for producing Beer from M/s. AB InBev Ltd. (Brand Haywards 5000) regularly but not paying IGST on production overhead charges received for the Beer of the Brand Owner - UBL production. Further, the impugned show cause notice alleges that the Petitioner is evading the GST by mis-classifying their product as "DDGS, Husk & Cattle Feed (Spent Grain) under HSN 1104 instead of HSN 2303 and clearing/supplying the same on `Nil' GST rate while HSN 2303 attracts GST @5%." 12. The impugned show cause notice refers to the investigation carried out before the same was issued. The impugned show cause notice clarifies that GST is being demanded for production overhead charges. The impugned show cause notice also takes a tentative view that the process and supply of service involved in manufacturing the final product is exigible to GST. The impugned show cause notice also notes that for these very services, the Petitioner has been paying IGST qua the Brand Haywards 500. Still, the Petitioner has been evading the payment of GST regarding UBL's Brand "Kingfisher". 13. At this stage, it is not for this Court to comment upon the validity of the tentative ....

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....he arguments inter alia would have involved even interpretation of the contractual terms. However, the impugned show cause notice refers to Mr. Vincent Vaz's statement admitting that the agreement between the Petitioner and UBL differs from the agreement, which was the subject matter of the Advance Ruling on which Mr. Nankani relies. 17. The fundamental premise that the impugned show cause notice seeks to levy GST on alcoholic liquor for human consumption cannot be accepted at face value. The Petitioner attempts to misread the impugned show cause notice and, based upon such misreading, interdict adjudication proceedings. This is impermissible, and the principles in Whirlpool Limited (supra) do not apply in such a situation. 18. The impugned show cause notice is not restricted only to the issue of production overhead charges. The Petitioner has classified their product as "DDGS, Husk & Cattle Feed (Spent Grain) under HSN 1104 instead of HSN 2303 and clearing/supplying the same on `Nil' GST rate while HSN 2303 attracts GST @5%." There is a serious issue with this classification. The show cause notice alleged that this is nothing but misclassification. Detailed though tentative reas....

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....equire it that recourse may be had to Article 226 of the Constitution. But even then, the Court must have good and sufficient reason to bypass the alternative remedy provided by statute. The Court observed, "Surely, matters involving the revenue where statutory remedies are available are not such matters". 23. The Court, after referring to its earlier precedent in United Bank of India V/s. Satyawati Tondon and Others (2010) 8 SCC 110 observed that: "we can also take judicial notice of the fact that the vast majority of the petitions under Article 226 of the Constitution are filed solely for the purpose of obtaining interim orders and thereafter prolong the proceedings by one device or the other. The practice certainly needs to be strongly discouraged". 24. In Rattan India Power Limited V/s. The Union of India and Ors. WP No.3201/2021 decided on 13.03.2023, decided by a coordinate Bench on 13.03.2023, dismissed the Writ Petition by relegating the petitioner to the alternate remedy before the Appellate Tribunal. Upon an exhaustive analysis of precedents on the subject, including the precedent in Greatship (India) Limited (supra) and others, the coordinate Bench declined to enter....