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TMI Blog2024 (4) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... e ultra vires. 10. D Any other relief this Hon'ble Court deems fit and proper may be passed." 2. Petitioner No. 1 is Small Scale Ice Cream Manufacturer Association and Petitioner No. 2 is its Vice President. It is pleaded in the petition that the petitioners were subjected to various taxes like VAT, Service Tax, Luxury Tax etc., however with the enforcement of the Goods and Service Tax Act (GST), various Central and State Taxes were unified. The main feature of the scheme is that the business or person who has opted to pay tax under this scheme can pay tax at a flat percentage of turnovers every quarter, instead of paying tax at a normal rate every month. The outer limit of Rs. 50 lacs of turnover has been extended to Rs. 75 lacs of turnover and was subsequently extended to Rs. 1.5 crores as provided under Section 10 of the GST Act. In order to control the revenue loss, the GST Council introduced a negative list of items on which benefits of the composition scheme shall not be extended. In the 17th meeting of the GST Council convened on 18th June 2017, certain resolutions were passed with regard to the approval of draft GST Rules and related Forms of adjustment of GST Rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices; technical exemption for temporary import/re-import; and to declare inter-state movement of any mode of conveyance for carrying goods or passengers or both or for repairs and maintenance as neither a supply of goods nor a supply of services. 4. In the meeting convened on 18th June 2017, the Council approved that Manufacturers of the following goods shall not be eligible for the Composition Levy:- a) Ice Cream and other edible ice, whether or not containing cocoa; b) Pan Masala; c) Tobacco and manufactured tobacco substitutes. 5. Learned counsel appearing for the petitioners would submit that the decision of the GST Council with regard to the exclusion of Ice Cream Manufacturers from the purview of composite levy of tax is erroneous and illegal. He would further submit that there is no reason assigned by the Council for the inclusion of Ice Cream Manufacturers in the negative list. He would also submit that the Council lost sight of the fact that all Ice Creams are milk-based and even Ice Candy is also termed 'Ice Cream'. He would contend that the Council in an unjust, illegal and arbitrary manner has treated the Ice Cream at par with Pan Masala and Tobacco product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2019. 7. I have heard learned counsel appearing for the parties and perused the documents annexed to this petition with utmost circumspection. 8. The limited grievance of the petitioners is that the 'Ice Cream' has been placed on par with Pan Masala and Tobacco. 9. From a perusal of the resolution passed by the GST Council, it is evident that the goods and services have been divided into 05 Tax slabs for collection of the tax, that is (i) 0%, (ii) 5%, (iii) 12%, (iv) 18% and (v) 28%. It was discussed in the meeting that the Small Scale Ice Cream Industries have been put out of the composition scheme and the Manufacturers have been put under the category of 18% of the GST Scheme. It was also discussed that except for the big brands of Ice Cream Industries, 80-90% of Ice Cream Industries fall under the Small Scale Industries and are low in their turnover and transaction business. The Council after discussion, put Pasta, Macaroni, Cakes, Malt, Mineral Water, Tobacco, Pan Masala etc. under the category of 18% GST and at the same time, kept the rate of tax for Human Hair (dressed, Thinned, and Bleached), Agarbatti at nil. The Council kept the rate of tax for certain items at 5% or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a taxation statute on the touchstone of social values as mentioned in the Constitution. An adverse conclusion can be drawn if a particular statute goes against such values. It is on thing to say that the taxation statute does not further social good, but quite another when it disturbs the social fabric. The court may take adverse note in respect to statutes falling in the latter category. We herein note two cases where an attempt has been made to raise this discussion to the pedestal of Directive Principles. In Sri Srinivasa Theatre and Ors. v. Government of Tamil Nadu and Ors., [(1992) 2 SCC 643], this Court held : "Article 14 of the Constitution enjoins upon the State not to deny to any person 'Equality before law' or 'the equal protection of laws' within the territory of India, The two expressions do not mean the same thing even if there may be much in common-Equality before law is a dynamic concept having many facets. One facet - the most commonly acknowledged - is that there shall be no privileged person or class and that none shall be above law. A facet which is of immediate relevance herein is the obligation upon the State to bring about, through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... country as well. In the context of our Constitution, however, there is an added obligation upon the State to employ the power of taxation - nay, all its powers - to achieve the goal adumbrated in Article 38." (Emphasis supplied) 11. In the matter of Ayurveda Pharmacy (supra) while dealing with the levy of sales tax on Ayurvedic drugs and medicines, the Hon'ble Supreme Court held that the Legislature is authorized to select different rates of tax for different commodities, but for the same class or category, there must be a rational basis for discrimination. The relevant para - 6 is reproduced herein below:- "6. We think that the appeals are entitled to succeed. Item 95 mentions the rate of 7% (now 8%) as the tax to be levied at the point of first sale in the State. Item 135 provides a rate of 30% in respect of Arishtams and Asavas at the point of first sale. We see no reason why Arishtams and Asavas should be treated differently from the general class of Ayurvedic medicines covered by Item 95. It is open to the Legislature, or the State Government if it is authorised in that behalf by the Legislature, to select different rates of tax for different commodities. But where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material that has been placed before us, therefore, the only conclusion to which we can come is that these preparations are medicinal preparations according to the standard Ayurvedic text-books referred to already, though they are also capable of being used as ordinary alcoholic beverages. They cannot however be taxed under the various Excise Acts in force in the concerned States in view of their being medicinal preparations which are governed by the Act." We are of opinion that similar considerations should apply to the appeals before us. The two preparations, Arishtams and Asavas, are medicinal preparations, and even though they contain a high alcohol content, so long as they continue to be identified as medicinal preparations they must be treated, for the purposes of the Sales Tax Law, in like manner as medicinal preparations generally, including those containing a lower percentage of alcohol. On this ground alone the appellants are entitled to succeed." 12. The judgment relied on by the learned counsel for the respondents rendered in the matter of Del Small Ice Cream Manufacturers Welfare's Association (supra), where the petition was filed impugning the decision dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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