2024 (2) TMI 350 - HC - GST

Classification of goods - Bio Pro-Enhac - Minwa and Minwa Plus which are Animal Feed Supplements and Feed Additives from drugs - exempt falling under HSN Code from 2309 or are covered by HSN 2936 and 2931 respectively? - HELD THAT - The 1st respondent rejected the claim of the petitioner on the main ground that the taxpayer has not provided information about the content percentage of the elements used in bio pro-enhac (vitamins, enzymes, antibiotic and feed percentage). Accordingly, the 1st respondent held the product bio pro-enhac falls under HSN code 2936. It must be noted that though the impugned order shows that the petitioner placed reliance on the decision in Sun Export Corporation 1997 (7) TMI 117 - SUPREME COURT and some other decisions to the effect that the supplements and additives of shrimp feed will also fall under the category of shrimp feed, the same was not discussed and analyzed by 1st respondent before recording his conclusion. Therefore, the impugned order is liable to be set aside to that extent and the matter requires remand for fresh consideration. The impugned order dated 07.02.2023 is set aside to the extent of the 1st respondent s finding on the product bio pro-enhac and the matter is remanded to 1st respondent to afford an opportunity of hearing to the petitioner regarding the nature of the product bio pro-enhac and its taxability and pass an appropriate order afresh on merits in accordance with the governing law and rules expeditiously - this writ petition is partly allowed.

Summary

Issues Involved:
1. Taxability of "Bio Pro-Enhac" under GST.
2. Taxability of "Minwa and Minwa Plus" under GST.
3. Applicability of HSN codes 2309, 2936, and 2931.
4. Validity of the impugned assessment order dated 07.02.2023.

Summary:

1. Taxability of "Bio Pro-Enhac":
The petitioner argued that "Bio Pro-Enhac" is a variety of shrimp feed containing elements such as calcium, propionate, fish meal, wheat bran, and corn meal, and should be classified under HSN code 2309, which exempts it from GST. The 1st respondent contended that "Bio Pro-Enhac" falls under HSN code 2936, which covers "Pro vitamins and vitamins, natural or reproduced by synthesis," and is taxable at 18%. The court noted that the 1st respondent rejected the petitioner's claim primarily because the petitioner did not provide information about the content percentage of the elements used in "Bio Pro-Enhac." The court found that the 1st respondent did not properly discuss and analyze the relevant case law, including the decision in Sun Export Corporation, which held that supplements and additives of animal feed are also covered under the generic term "animal feed." Therefore, the court set aside the impugned order to the extent of the finding on "Bio Pro-Enhac" and remanded the matter for fresh consideration.

2. Taxability of "Minwa and Minwa Plus":
The petitioner claimed that "Minwa and Minwa Plus" are micro minerals used as feed supplements and should be classified under HSN code 2309, which exempts them from GST. The 1st respondent argued that these products are used to stabilize alkalinity and control PH fluctuations in water and fall under HSN code 2931, which covers "other organo-inorganic compounds" and is taxable at 18%. The court agreed with the 1st respondent, noting that the main purpose of "Minwa and Minwa Plus" is to maintain PH levels in shrimp ponds, not to act as shrimp feed or feed supplements. Therefore, the court upheld the impugned order to the extent that it classified "Minwa and Minwa Plus" under HSN code 2931 and found them taxable at 18%.

3. Applicability of HSN Codes:
The court considered the applicability of HSN codes 2309, 2936, and 2931. HSN code 2309 covers animal feed supplements that improve digestion and safeguard health, while HSN code 2936 covers vitamins and pro-vitamins that are medicinal in nature. HSN code 2931 covers "other organo-inorganic compounds." The court found that "Bio Pro-Enhac" requires further examination to determine its correct classification, while "Minwa and Minwa Plus" correctly fall under HSN code 2931.

4. Validity of the Impugned Assessment Order:
The court found that the impugned assessment order dated 07.02.2023 did not properly address the petitioner's arguments and relevant case law regarding "Bio Pro-Enhac." Therefore, the court set aside the order to the extent of the finding on "Bio Pro-Enhac" and remanded the matter for fresh consideration. The court upheld the order regarding "Minwa and Minwa Plus."

Conclusion:
The writ petition is partly allowed. The impugned order dated 07.02.2023 is set aside concerning the classification of "Bio Pro-Enhac," and the matter is remanded for fresh consideration. The order is upheld regarding the classification of "Minwa and Minwa Plus." No costs.