Manufacturers Traders Association vs Union Of India

This application pertains to a request for an expedited hearing of a petition through video conferencing. The petitioners are seeking this expedited hearing, and it is noted that the respondents have not raised any objections to this request. Therefore, the application for an early hearing via video conferencing is approved.

The decision to grant the early hearing is influenced by the understanding that the petition involves a concise and straightforward issue. This implies that the matter at hand can be addressed efficiently and does not require extensive deliberation or prolonged proceedings.

Overall, the court acknowledges the simplicity of the question presented in the petition and, in consideration of this, grants the application for an early hearing through video conferencing, thus expediting the legal process.

The petitioners, represented by a society of fabric manufacturers, have filed a petition under Article 226 of the Indian Constitution seeking a writ of mandamus against the Central Government and the Government of NCT of Delhi. They request the notification of a Goods and Services Tax (GST) rate of 5% for all types of fabrics falling under Chapters 50 to 63 of the Customs Tariff, in line with the recommendations of the Goods and Service Tax Council.

The matter primarily concerns three GST Notifications:

1.Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, issued by the Central Government, which sets the central tax rate at 6% for intra-state supply of fabrics.

2.Notification No. 1/2017-Integrated Tax (Rate) dated 28.06.2017, also issued by the Central Government, which sets the integrated tax rate at 12% for inter-state supply of fabrics.

3.Notification No. 1/2017-State Tax (Rate) dated 30.06.2017, issued by the Government of NCT of Delhi, which sets the state tax rate at 6% for intra-state supply of fabrics within Delhi.

The petitioners argue that the current tax rates are not in line with the recommendations of the GST Council and seek a uniform GST rate of 5% for all fabrics covered under Chapters 50 to 63 of the Customs Tariff.

The petitioners have requested an early hearing of the petition via video conferencing, which is granted since there are no objections from the respondents. With the consent of both parties’ counsels, the court proceeds to hear the main petition for final disposal.

Finally, the application seeking early hearing is disposed of accordingly, allowing the main petition to proceed for final disposal.

The case under consideration involves a petition (W.P.(C) 597/2019 & CM APPL. 22638/2020) filed by Petitioner No. 1, a society of fabric manufacturers, invoking Article 226 of the Indian Constitution seeking a writ of mandamus against the Central Government (Respondent No. 1) and the Government of NCT of Delhi (Respondent No. 2). The petition seeks to enforce the Goods and Service Tax (GST) rate of 5% for all varieties of fabrics falling under Chapters 50 to 63 of the Customs Tariff, in line with the recommendations of the Goods and Service Tax Council (Respondent No. 3).

The dispute primarily revolves around three GST notifications issued by the respondents. The first notification (No. 1/2017-Central Tax (Rate)) dated 28.06.2017, imposes a central tax rate of 6% on intra-state supply of fabrics. The second notification (No. 1/2017-Integrated Tax (Rate)) dated 28.06.2017, imposes an integrated tax rate of 12% on inter-state supply of fabrics. The third notification (No. 1/2017-State Tax (Rate)) dated 30.06.2017, imposes a state tax rate of 6% on intra-state supply of fabrics within the NCT of Delhi. These notifications deviate from the uniform 5% GST rate recommended by Respondent No. 3 for fabrics under Chapters 50 to 63, with exceptions for Chapters 58 and 59 taxed at 12%.

The petitioners argue that these notifications are inconsistent with the recommendations of Respondent No. 3. They cite the 15th Meeting held on 03.06.2017, where a uniform 5% tax rate for fabrics under Chapters 50 to 63 was finalized, contrary to the proposed 12% rate for certain chapters. The subsequent 16th Meeting on 11.06.2017 reaffirmed this decision. Despite this, Respondents No. 1 and 2 implemented tax rates not in accordance with the recommendations of Respondent No. 3.

During preliminary hearings, the court deemed it necessary to seek the views of Respondent No. 3 on the matter. Thus, an order was issued on 11.10.2019, directing the matter to be referred to Respondent No. 3 for its perspective.

In summary, the petition seeks the court’s intervention to ensure the implementation of the recommended 5% GST rate for fabrics under Chapters 50 to 63, as per the decisions of Respondent No. 3, against the notifications issued by Respondents No. 1 and 2 imposing different tax rates.

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