Harsh Polyfabric Pvt Ltd VS Union Of India And Ors

The Court convened to address a petition where the petitioner has complied with the directive to deposit the required court fees and has submitted pertinent documents to this effect, which have been duly filed for record-keeping. Legal representatives for both parties were present during the proceedings.

The crux of the petition involves contesting an order issued on October 31, 2019, by the Appellate Authority under the West Bengal Goods and Services Tax Act and Rules, 2017. The petitioner seeks judicial review of this order.

After considering the arguments presented by both sides and examining the contents of the impugned order, the presiding judge notes that the petitioner is seeking resolution through this writ petition.

India is tasked with adjudicating on the dispute brought forth by the petitioner regarding the classification of its product under the West Bengal Goods and Services Tax Act and Rules, 2017. The petitioner contests the order issued by the Appellate Authority on October 31, 2019, which determined the classification of the petitioner’s product, specifically PPSB bed sheets, under the Customs & Central Excise Tariff Act.

The central issue revolves around the classification of the petitioner’s product and the applicable tariff rates. The petitioner asserts that its product should be classified under Chapter 63 of the Customs Tariff Act, with the corresponding HSN Code 63041930. Consequently, the petitioner has been paying a GST rate of 5% on its sales based on this classification.

However, the Appellate Authority rejected the petitioner’s classification, instead placing the product under Chapters 56 to 62 of the Customs and Central Excise Tariff Act. It argued that the petitioner’s bed sheets, made from non-woven fabric, should be treated as akin to “Non-woven Fabric” and therefore classified under Chapter 56 03, attracting a GST rate of 12%.

The Court, after considering submissions from both parties and reviewing the impugned order, concludes that it must determine the appropriate classification for the petitioner’s product. It notes that the petitioner does not directly use PP granules in manufacturing its bed sheets but rather utilizes non-woven fabric, which is processed from these granules. The dispute centers on whether the bed sheets should be classified under Chapter 63, as asserted by the petitioner, or under Chapters 56 to 62, as determined by the Appellate Authority.

In exercising its jurisdiction under Article 226 of the Constitution of India, the Court is tasked with resolving this classification dispute. The Court’s decision will have significant implications for the petitioner’s tax liabilities, as it hinges on the applicable GST rate based on the product’s classification.

Thus, the Court directs the petitioner to deposit the necessary court fees and documents, as per its earlier directive, and proceeds to hear arguments from both parties before rendering a decision on the classification of the petitioner’s product under the relevant tariff provisions.

The court proceedings in question revolve around a writ petition filed by a petitioner challenging an order issued by the Appellate Authority under the West Bengal Goods and Services Tax Act and Rules, 2017. The petitioner seeks adjudication under Article 226 of the Indian Constitution regarding the classification of their product under the Customs & Central Excise Tariff Act. Specifically, the petitioner challenges the finding that their PPSB bed sheets, made from non-woven fabric, should be classified under Chapter 56 to 62 rather than Chapter 63 of the Customs Tariff Act, resulting in a higher tax rate of 12%.

The court, upon hearing arguments from both parties, acknowledges the complexity of determining the appropriate classification of the product. It emphasizes that such determination requires scientific and technical expertise, which the court, in its constitutional writ jurisdiction, is not equipped to provide. The court asserts that its role is not to act as an appellate authority over the decisions of expert adjudicating bodies but to ensure procedural fairness and legality. It concludes that there has been no violation of natural justice or procedural irregularity in the Appellate Authority’s decision.

In essence, the court declines to intervene in the technical classification matter, stressing that such determinations should be left to expert bodies equipped to assess the scientific and technical aspects of the product’s composition and manufacturing process.

The court, following its directive, acknowledges that the petitioner has already paid the required court fees and filed the necessary documents. Both parties’ advocates have presented their arguments. The petitioner has filed a writ petition challenging an order dated October 31, 2019, issued by the Appellate Authority under the West Bengal Goods and Services Tax Act and Rules, 2017.

The crux of the petitioner’s challenge lies in the classification of its product under the Customs & Central Excise Tariff Act. Specifically, the petitioner contests the finding of the Appellate Authority that its product, PPSB bed sheet, falls under Chapter 56 to 62 of the Tariff Act and should be taxed at 12%. The petitioner argues that its product should be classified under Chapter 63, with an HSN Code of 63041930, and taxed at 5%.

The court, after considering the arguments and examining the impugned order, declines to adjudicate the technical and scientific aspects of the product’s composition and manufacturing process. It asserts that such classification requires expertise in the relevant fields. Additionally, the court emphasizes that it should not act as an appellate authority over the decisions of adjudicating bodies or substitute their findings. Instead, it’s the prerogative of the appropriate authority, equipped with scientific and technical knowledge, to make such determinations.

The court finds no violation of natural justice or procedural irregularity in the Appellate Authority’s decision. Consequently, the writ petition (WPO 588 of 2019) is dismissed. However, the petitioner is granted liberty to raise the issues before the Appellate forum or Tribunal in the future.

In summary, the court dismisses the writ petition while affirming the importance of technical expertise in product classification and adjudication.

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Harsh Polyfabric Pvt Ltd

For Reference Visit:
Calcutta High Court

Read Another Case Law:
GST Case Law