2024 (8) TMI 301 - HC - GST

Violation of principls of natural justice - petitioner was unaware of the notices that preceded the respective assessment orders and thus, failed to participate in the proceedings before the respondent - HELD THAT - The Court is of the view that the petitioner has made out prima facie case as the live honey bees traded by the petitioner may not be liable to GST in terms of Schedule 1 of the GST Act, 2017. The Schedule has been downloaded by the petitioner from the Central Board of Indirect Taxes and Customs website. As far as the packing materials are concerned, it appears to be a part of the composite supply with the exempted product as defined in Section 2(30) read with Section 8(a) of the respective GST enactments. The petitioner has made out a prima facie case on merits and warranting interference. Further, the petitioner has neglected in not responding to the respective notices that preceded the respective impugned orders. The Court is of the view that the impugned orders can be set aside on terms. The petitioner shall deposit a sum of Rs. 1,00,000/- to the credit of the respondent from its Electronic Cash Register within a period of 30 days from the date of receipt of a copy of this order - The impugned orders, which stand quashed, shall be treated as addendum to the respective show cause notices that preceded the respective impugned orders. Petition disposed off.

Summary

Issues Involved:
Challenging assessment orders for multiple years, applicability of GST on sale of live honey bees, treatment of packing material value, delay in approaching the court, dismissal based on latches and limitation, prima facie case on merits, setting aside impugned orders, deposit requirement, fresh orders by respondent.

Analysis:

Challenging Assessment Orders:
The petitioner, a dealer in live honey bees, challenged assessment orders for the years 2018-19 to 2021-22, citing unawareness of preceding notices and failure to participate in proceedings, leading to the impugned orders.

Applicability of GST on Sale of Live Honey Bees:
Petitioner claimed exemption from tax under GST Act, Schedule 1, for sale of live honey bees. Respondent treated packing material value as part of supply, demanding tax. Petitioner argued against taxing packing material, emphasizing the sale of live honey bees.

Dismissal Based on Latches and Limitation:
Respondent sought dismissal citing latches and time-barred appellate remedy under GST enactments, referencing relevant Supreme Court decisions. However, the court considered the prima facie case made by the petitioner regarding GST applicability on live honey bees.

Prima Facie Case on Merits:
The court found merit in petitioner's argument, noting the exemption for live honey bees under Schedule 1 of the GST Act, while considering packing material as part of a composite supply with the exempted product.

Setting Aside Impugned Orders:
In light of the petitioner's neglect in responding to notices and the prima facie case on merits, the court decided to set aside the impugned orders, requiring a deposit of Rs. 1,00,000 to the respondent within 30 days for further proceedings.

Fresh Orders by Respondent:
The court directed the respondent to pass fresh orders expeditiously, considering the petitioner's submissions and the deposit made, ensuring the petitioner's opportunity to be heard before the final decision.

This comprehensive analysis covers the issues raised in the legal judgment, providing a detailed overview of the arguments presented, the court's considerations, and the final directives given for the resolution of the matter.