Del Small Ice Cream Manufacturers Welfare’s Association VS  Union Of India And Anr

The petitioner, representing over 50 small-scale ice cream manufacturing units in the National Capital Territory of Delhi, has lodged a petition challenging the decision of the Goods and Services Tax Council (GST Council) dated June 18, 2017. This decision, made under Section 10(2)(e) of the Central Goods & Services Tax Act, 2017, excludes ice cream from the benefits of the Composition Scheme outlined in Section 10 of the Act. The petitioner argues that this exclusion violates the principles enshrined in Articles 14 and 19 of the Constitution of India and contravenes natural justice.

Following the filing of the petition, it was duly reviewed and notice was issued. The counsel representing the GST Council, respondent no.2, has responded, stating their position.

The petitioner, representing over 50 small-scale ice cream manufacturing units in Delhi, challenges the Goods and Services Tax Council’s decision from June 18, 2017. This decision, made under Section 10(2)(e) of the Central Goods & Services Tax Act, 2017, excluded ice cream from the Composition Scheme benefits under Section 10 of the Act. The petitioner argues that this exclusion violates Articles 14 and 19 of the Constitution of India and principles of natural justice.

The petition was entertained, and a notice was issued. The counsel for the GST Council stated that they had considered the issue’s urgency, especially with the impending ice cream sales season. They asked the petitioner’s counsel if they wished to file a rejoinder to the counter affidavit, but the petitioner declined. The GST Council’s counsel confirmed readiness to argue the petition immediately. However, the petitioner’s counsel noted an error in the prayer paragraph of the petition, stating that the challenge should also encompass the minutes of the Sixteenth meeting of the GST Council. The respondents’ counsel agreed to ignore this technicality.

Section 10(1) of the Act allows registered persons with an aggregate turnover below Rs. 50,00,000 in the previous financial year to opt for a composition scheme, paying a prescribed tax rate. The first proviso grants the government the power, through notification, to increase this limit to a maximum of Rs. 1,50,00,000, based on the GST Council’s recommendation. However, Section 10(2)(e) empowers the government, upon the GST Council’s recommendation, to notify goods for exclusion from this scheme.

The petitioner, representing over 50 small-scale ice cream manufacturing units in Delhi, challenges a decision by the Goods and Services Tax Council (GST Council) made on June 18, 2017. This decision, made under Section 10(2)(e) of the Central Goods & Services Tax Act, 2017, excluded ice cream from the benefits of the Composition Scheme outlined in Section 10 of the Act. The petitioner argues that this exclusion violates Articles 14 and 19 of the Indian Constitution and principles of natural justice.

The court entertained the petition and issued a notice. Considering the urgency due to the approaching ice cream sales season, the court inquired if the petitioner wanted to file a rejoinder to the counter affidavit, which was declined. The court then asked if the respondent’s counsel was ready to argue the case, which was affirmed. The petitioner’s counsel noted an error in the prayer paragraph of the petition, seeking an amendment regarding the challenge to the minutes of the Sixteenth meeting of the GST Council. The respondent’s counsel waived any technical objections to this amendment.

Section 10(1) of the Act allows registered persons with turnover below Rs. 50,00,000 to opt for a Composition Scheme. The first proviso grants the government authority to increase this limit to Rs. 1,50,00,000 based on the GST Council’s recommendation. Section 10(2)(e) empowers the government, on GST Council’s recommendation, to exclude certain goods from this scheme.

The petitioner’s counsel explained that the turnover limit was successively raised to Rs. 75,00,000 and Rs. 1,50,00,000. However, the GST Council, in its Seventeenth Meeting on June 18, 2017, recommended notifying ice cream, thereby excluding it from the Composition Scheme. This meant small ice cream manufacturers with turnover below Rs. 1,50,00,000 annually would have to comply with Section 9 of the Act instead.

The respondent’s counsel mentioned another similar petition related to ice cream set for consideration on March 5, 2021, indicating a nationwide issue with similar petitions in various High Courts. No High Court decision had been made on this matter yet.

Considering the lack of High Court decisions and the pending petitions, the court decided not to delay the case. The decision made in this case would apply to the next writ petition listed for March 5, 2021.

The petitioner’s contention is that the GST Council erroneously grouped ice cream with pan masala and tobacco under Section 10(2)(e) of the Act.

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