TaxTMI 
TaxTMI 
2026 (1) TMI 95
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....A)-037-2022-23-GST dt.25.7.22 (Annexure P), as being arbitrary, illegal, against judicial discipline, as being opposed to orders of Honourable Supreme Court and Honourable High Courts; (b) Issue a writ of Mandamus to declare that flavoured milk merits classification under GST Tariff Heading 0402 and accordingly be subject to GST @ 5% (2.5% CGST and 2.5% SGST) (c) Issue a writ of Mandamus or such other Writ, Order or direction, as this Honourable Court may deem fit, consequently, directing Respondent No.3 to refund Rs.72,95,235/-, paid by the Petitioner vide DRC 03 Challans dt.21.12.21 (Annexure M1, M2 and M3), against illegal demand made by Respondent No.3 and confirmed by Respondent No.2; (d) To pass such other orders, directions and writs as this Honourable High Court may deem fit in the facts and circumstances of the case, and in the interests of justice, including the costs of this writ petition. For which Act of kindness, the petitioner shall as in duty bound, ever pray." 2. Heard learned counsel for the petitioner, learned counsel for the respondents No.1 to 4 and learned HCGP for respondent No.5 and perused the material on record. 3.....
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....54 of 2024 wherein this Court had held that flavoured mifk would fall within the tariff heading 0402 and would not fall under the tariff heading 2202. 5. On the question of conversion charges and taxability of conversion charges from milk to milk powder, the learned counsel for the petitioner would contend that the said issue was considered again in the appeal filed for the subsequent period of 2019-2020 wherein the appellate authority has accepted the contention of the petitioner that such conversion charges would not attract interest at 18%, but would attract tax at the rate of 5%. 6. Accordingly, following the earlier order of this Court in W.P.No.254 of 2024, this Writ petition is disposed of in the following manner: 1) The order of assessment, dated 09.03.2021, and the order of appeal dated 16.12.2024 are set aside and the matter is remanded back to the Assessing Officer for passing a fresh assessment order; 2) The assessing officer shall levy tax on the sale of flavoured milk by the petitioner, by treating the flavoured milk to be under tariff heading No.0402; 3) The question of taxability of conversion charges from milk to milk po....
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....tting aside the assessment order, dated 24.01.2022 and the appellate order, dated 16.12.2024, and remanding the matter back to the Assessment Authority to issue fresh proceedings by applying the rate of tax @ 5% on the sale of flavoured milk. There shall be no order as to costs. As a sequel, pending miscellaneous applications, if any, shall stand closed." So also under identical circumstances in the case of Sri Vijaya Vishakha Milk Producers Company Ltd. Vs. Assistant Commissioner of Central Tax and others, in Writ Petition No.254/2024 dated 10.12.2024, the Division Bench of the Andhra Pradesh High Court, vide 'Annexure - R', are held as under: "Annexure-R: "The petitioner is a registered dealer under the GST Act, dealing with milk and milk products. As part of its business, the petitioner processes and sells, flavoured milk, to customers within and outside the State of Andhra Pradesh. For the purpose of payment of tax, on the sale of flavoured milk, the petitioner had filed its returns by placing the product "flavoured milk" in Tariff Heading No.0402 99 90 (hereinafter referred to as 402). The 1st respondent, while considering the returns file....
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....ion under Chapter Heading 22029030 is the most specific description as per the guideline given under Rule 3(a) of General rules of Interpretation of Customs Tariff Act, 1975. 4. The 1st respondent passed the impugned order on the following grounds: 1) Flavoured milk not only contains sugar and sweetening matter but also Badam flavour which takes it out outside 0402. Entry 2202 is "beverages containing milk' which would mean that flavoured milk would fall within this entry; ii) Entry 0402 relates to milk. Flavoured milk cannot be treated as milk, as addition of Badam flavour changes it from milk to a special drink. Consequently flavoured milk cannot be classified under Entry No.0402; iii) The rules for interpretation of the First Schedule to the Custom Tariff Act, 1975 would be applicable for interpretation of the classification of goods under the GST Regime. Rule 3(a) of the Customs Tariff Act specifies that where goods can be classified under two or more headings, the heading which provides the more specific discrepancy shall be preferred to the heading providing a more general discrepancy. As flavoured milk would amount to a beverage, 2202 ....
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....eliberately sought to pay tax by classifying flavoured milk under 0402 even though flavoured milk would not fall within that category. The learned Standing Counsel would contend that the change in classification clearly amounts to an attempt to evade payment of tax and Sections 122 (2)(b) and 74 of the GST Act would be applicable. 8. A preliminary objection, as to the maintainability of the writ petition, has also been raised on the ground that questions of classification should be left to the tribunals, set up under taxation statutes. and the scope of judicial review should not be extended to such issues. Consideration of the Court: 9. At the outset, the preliminary objection relating to the maintainability of the writ petition needs to be addressed. Though, the contention of the respondents that matters of classification should be best left alone to the tribunals does bear consideration, the fact remains that the writ petition has been pending before this court for the past one year and it would not be fair to relegate the petitioner to the remedy of appeal, especially when the period for filing such an appeal has lapsed. In any event, the existence of ....
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....However It is treated as falling in 0402. Thus, the test propounded by the 1 respondent that only plain milk is to be treated as falling under 0402 is not correct. The finding of the 1 respondent that flavoured milk goes out of this entry by addition of Badam flavour also cannot be accepted. Though the entry speaks only of milk containing added sugar or other sweetening matter, flavoured milk cannot be taken out of tariff heading 0402 merely because of addition of 0.5% of Badam flavour. 13. The second ground taken by the 1 respondent is that "beverage" is any type of drink except water and as such any milk drink, would fall within 2202. This ground is also not available if the earlier entry in Tariff Item 2202 is seen. The entries under Chapter heading 22 read as follows: Tariff item Description of goods 2202 10 --Waters, including mineral waters and aerated waters, containing added sugar or other sweetened matter or flavored -other 2202 91 00 -- Non-alcoholic beer 220299 -other 2202 99 10 --Soya milk drinks, whether or not sweetened or flavored 2202 99 20 ---Fruit pulp or fruit juice based drinks 2202 99 30 ---Beverag....
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....s. As a sequel, miscellaneous petitions, pending if any, shall stand closed." The said judgment in Sri. Vijaya Vishakha Milk Producers Company Ltd. was confirmed by the Apex Court in SLP (Civil) Dairy No.17602/2025 vide 'Annexure-S'. "ORDER Delay condoned. We are not inclined to interfere with the impugned judgment; hence, the present special leave petition is dismissed. Pending application(s), if any, shall stand disposed of." So also the Madras High Court in the case PARLE AGRO PVT. LTD. VS. UNION OF INDIA reported in 2024(81) G.S.T.L. 283 (Mad.) / (2023) 12 Centrax 199 (Mad.) vide 'Annexure T' held as under: "Flavoured milk - Heading 6402 of Customs Act - Classification - Petitioner assessee, had challenged decision of Authority for Advance Ruling (AAR), in case of Britannia Industries Ltd. (2020 (36) G.S.T.L. 582 (A.A.R.- GST-TN [2020] 116 taxmann.com 572 (AAR Tamilnadu)] based on recommendation of GST Council held that UHT sterilized flavoured milk is not 30 ibid Question arose as to whether flavoured milk fell under category of classifiable under Heading 0402/0404 but classifiable under Heading 2202 99 (Hea....