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2023 (1) TMI 48 - HC - GSTTaxability - Dried Distillers Grains Solubles (DDGS) - Distillers Wet Grains Solubles (DWGS) - Undenatured Extra Neutral Alcohol (ENA) - Challenge to CBI Circular No.163/19/2021-GST dated 06.10.2021 to the extent that it erroneously deals with and determines the issue of taxability of DDGS and DWGS - HELD THAT - This Court on a query raised, is pointed out that the last meeting of the council was held on 18.05.2021 where the issue of taxability of ENA in GST has already been discussed. The next meeting of the council is scheduled on 17.12.2022. It is also argued that the impugned circular is ultra vires the statue and in derogation of the statutory scheme of classification and with a further argument that the issue with regard to the taxability of ENA which is pending for the consideration of GST council is likely to affect the entire country. Therefore, any adjudication on the part of the officer concerned of the show cause notice, which is challenged would have a bearing on all the pending issues. Issue Notice, returnable on 22.12.2022.
Issues:
Taxability of Dried Distillers Grains Solubles (DDGS), Distillers Wet Grains Solubles (DWGS), and Undenatured Extra Neutral Alcohol (ENA) under GST laws challenged in light of CBI Circular No.163/19/2021-GST and actions of respondent No.3. Analysis: The petitioner, a private limited company engaged in the manufacture and sale of alcoholic beverages and cattle feeds, challenges the taxability of DDGS, DWGS, and ENA under GST laws. The controversy arises from the CBI Circular No.163/19/2021-GST dated 06.10.2021 and the actions of respondent No.3, which the petitioner claims are contrary to the agreed status quo regarding ENA taxation until the final recommendation of the GST Council. The petitioner seeks various declarations, including the ultra vires nature of the circular, correct classification of DDGS/DWGS, and the alleged double taxation on ENA already subjected to VAT. The petitioner also requests writs of certiorari and mandamus to quash the circular and related notices and direct the concerned authorities to withdraw them. The High Court notes the petitioner's arguments regarding the pending consideration of ENA taxability by the GST Council, emphasizing the potential nationwide impact of any premature adjudication on the issue. The Court is informed that the last council meeting discussed the taxability of ENA, with the next meeting scheduled for 17.12.2022. The petitioner asserts that the impugned circular goes against statutory classification schemes and could influence all pending taxability issues. The senior advocate for the petitioner highlights the upcoming hearing date of 16.12.2022 before the concerned officer, who is reluctant to grant further adjournments. In response to the arguments presented, the High Court issues a notice returnable on 22.12.2022, directing the respondent to file an affidavit-in-reply. The petitioner is permitted to seek an adjournment for the hearing on 16.12.2022, with the officer concerned instructed to consider such requests. Additionally, the Court allows direct service through e-mode on the official email address apart from the regular mode of service. The case is set for further proceedings based on the submissions and arguments made by the parties involved.
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