2019 (11) TMI 1652 - HC - GST

Violation of principles of natural justice - levy of tax on turnover of tamarind - exempted under Entry No. 57 in N/N. 2/2017 Central Tax (rate), dated 28.06.2017 - HELD THAT - In view of the clarification sought for by the State Government from the Spice Board though Spice Board has nothing to do with the issue and taking into consideration the judgments referred to by the Counsel for the Petitioner and since the request of the Petitioner for a personal hearing was not awarded, though, it may not be necessary always, but in the instant case, having regard to the facts in issue, we feel that it would be just and proper to give personal hearing to the petitioner to clarify the issues involved. The matter is remanded back to the authorities concerned to deal with the same after giving an opportunity of hearing to the Petitioners - Petition allowed by way of remand.

Summary

Issues:
1. Interpretation of tax levied on Tamarind under GST Law.
2. Whether the imposition of 5% GST on dried Tamarind is legal and correct.

Analysis:
1. The petitioner, a registered dealer under the AP VAT Act, challenged the 1st Respondent's decision to levy 5% tax on Tamarind turnover, claiming it was exempted under Entry No. 57 of a Central Tax notification. The petitioner argued that the classification of Tamarind as 'Dried Tamarind' was arbitrary and violated natural justice principles. The grounds raised included the lack of a personal hearing and misinterpretation of the term 'Tamarind' by the authorities.

2. The legal counsel for the petitioner argued against the imposition of 5% GST on dried Tamarind, citing the absence of a clear definition and the exemption granted to Tamarind. Several judgments were presented to support this argument, along with letters and brochures indicating confusion over the classification of Tamarind. The counsel emphasized the need for a personal hearing to clarify the issue effectively.

3. In response, the Respondents contended that dried Tamarind was distinct from fresh Tamarind, justifying the 5% GST imposition. The Assistant Solicitor General introduced a subsequent notification excluding Tamarind dried from GST, effective from October 2019. Considering the evolving events and the petitioner's request for a personal hearing, the court found it just to set aside the impugned order and remand the matter for reconsideration after granting the petitioner a hearing to clarify the issues involved.

4. The judgment highlighted the importance of understanding the distinction between fresh and dried Tamarind in the context of GST taxation. The court's decision to allow the Writ Petition, provide a personal hearing, and remand the matter back to the authorities demonstrated a commitment to ensuring procedural fairness and clarity in tax imposition matters.