2021 (6) TMI 33 - HC - GST

Classification of Job-work activities - rate of tax - job work activities undertaken by the contract bottlers concerning bottling of alcoholic beverages - HELD THAT - Since this matter involves revenue, the GST Council is requested to take up the matter, at the earliest, and to reach a decision, one way or the other, qua the issue at hand. Counsel for the respondents will inform us as to the decision taken by the GST Council on the next date of hearing.

Summary

Issues:
1. Exemption from filing attested affidavits with the writ petition.
2. Classification and tax rate for job work activities by contract bottlers for bottling alcoholic beverages.

Exemption from filing attested affidavits:
The court allowed the application subject to exceptions, directing the petitioner to submit duly attested affidavits within three days of the court's normal work pattern resumption. This issue was disposed of promptly by the court.

Classification and tax rate for job work activities:
The primary issue in the writ petition concerned the appropriate classification and tax rate for job work activities related to bottling alcoholic beverages by contract bottlers. The petitioner's counsel referred to the GST Council's meetings, highlighting the lack of uniformity among states regarding tax imposition on such activities. Some states suggested total exemption, while others proposed the highest tax rate, with some opting for a 5% tax rate under "food and food products" classification.

The GST Council indicated its intention to decide on the matter rather than leaving it to the courts. The Directorate General of Goods & Services Tax Intelligence initiated inquiries through summons, with some unfairly accusing the assessee of tax evasion. Despite the pandemic, officers insisted on the personal appearance of the noticee, which was deemed unsafe by the court due to COVID-19 risks.

Both respondents acknowledged the issue pending before the GST Council, which expressed its intent to make a decision on the matter. The court decided to issue notices for the writ petition and related application. The respondents were given time to file counter-affidavits and rejoinders before the next hearing date.

To ensure safety, the court directed that proceedings should continue virtually, and no coercive measures should be taken against the noticee until the next hearing, considering the ongoing pandemic situation. The court urged the GST Council to expedite its decision on the matter, emphasizing the importance of a timely resolution due to revenue implications.

In conclusion, the court addressed the issues raised by the petitioner regarding tax classification and rate for job work activities, emphasizing the need for a prompt decision by the GST Council and ensuring safety during legal proceedings amidst the pandemic.

This detailed analysis provides a comprehensive overview of the judgment, covering all relevant issues and legal aspects involved in the case.