Tvl. Vibis Natural Bee Farms Vs Deputy State Tax Officer-1
Date: July 25, 2024
Subject Matter
Packing material supplied for selling live honey bee is a part of composite supply
Summary
The case involves four writ petitions filed by the petitioner, a dealer in live honey bees, challenging the GST assessment orders for the assessment years 2018-19 to 2021-22. The petitioner claims ignorance of the notices that led to these assessment orders and asserts that live honey bees are exempt from GST, as per Schedule 1 of the GST Act, 2017. The petitioner argues that the authorities improperly treated the value of packing materials as part of the taxable supply, which should not be taxed due to the exempt status of the principal product (live honey bees). - The learned Additional Government Pleader for the respondent countered that the writ petitions should be dismissed due to delays and latches based on previous court rulings regarding the timeliness of appeals and responses to notices. - The court found that the petitioner likely had a valid case regarding the exempt status of live honey bees and considered the packing materials as part of a composite supply related to the exempt product. Given these findings, the court decided to set aside the impugned orders on certain conditions, allowing the petitioner to re-present their case after making a financial deposit and submitting a reply to the show cause notices. The court directed that fresh orders should be passed based on the merits of the case after hearing the petitioner.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
By this common order, these four Writ Petitions are taken up for disposal.
2. Heard the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent.
3. The petitioner claims to be a dealer in selling live honey bees. In these Writ Petitions, the petitioner has challenging the respective assessment orders passed for the assessment years 2018-19 to 2021-22 as detailed below:
| S. No | W.P.(MD)Nos. | Assessment year | Assessment order/ dated | Demand Rs. |
| 1. | 17237/2024 | 2020-21 | 33AIBPJ3432C1Z1/2020-21/ 31.07.2023 | 8,61,634 |
| 2. | 17238/2024 | 2021-22 | 33AIBPJ3432C1Z1/2021-22/ 31.07.2023 | 5,23,488 |
| 3. | 17239/2024 | 2019-20 | 33AIBPJ3432C1Z1/2019-20/ 01.08.2023 | 6,94,948 |
| 4. | 17240/2024 | 2018-19 | 33AIBPJ3432C1Z1/2018-19/ 31.07.2023 | 4,05,458 |
4. The case of the petitioner is that the petitioner is a small time operator 3/9 and was unaware of the notices that preceded the respective assessment orders and thus, failed to participate in the proceedings before the respondent, which is culminated in the impugned order.
5. It is submitted that for the same reason that the petitioner was also unaware of the impugned orders passed as detailed above, the petitioner has failed to approach this Court at an earlier point of time.
6. Specifically, the learned counsel for the petitioner submits that the petitioner is engaged in sale/supply of live honey bees, which is exempted from tax in terms of serial No.6 to the Schedule 1 to the GST Act, 2017.
7. It is submitted that the respondent has treated the value of the packing material for selling live honey bees as a value of supply and has demanded tax from the petitioner.
8. In this connection, the learned counsel for the petitioner has drawn attention to Section 8(a) of the respective GST enactments, in which, in terms of composite supply comprising two or more supplies, one of which is a principal supply shall be treated as a supply of such principal supply.
9. It is submitted that the petitioner cannot be mulcted with the tax on the value of packing material as the petitioner is engaged in sale of live honey bees.
10. The learned counsel for the petitioner submits that the petitioner is willing to abide by the reason with conditions, which the Court may impose so that the petitioner can explain the case afresh before the respondent.
11. On the other hand, the learned Additional Government Pleader for the respondent would submit that these Writ Petitions are liable to be dismissed on account of latches, in the light of the decision of the Hon’ble Supreme Court in the case of Assistant Commissioner (CT) LTU, Kakinada and others vs. Glaxo Smith Kline Consumer Health Care Limited reported in 2020 SCC Online SC 440.
12. It is submitted that the appellate remedy is also time barred in terms of 5/9 limitation under Section 107 of the respective GST Enactments as held by the Hon’ble Supreme Court in the case of Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others reported in (2008) 3 SCC 70 and submitted that these Writ Petitions are liable to be dismissed.
13. Having considered the submissions made by the learned counsel for the petitioner and learned Additional Government Pleader for the respondent, 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.
14. 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.
15. Thus, in my view, 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.
16. Considering the same, 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/-(Rupees One Lakh only) 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.
17. The impugned orders, which stand quashed, shall be treated as addendum to the respective show cause notices that preceded the respective impugned orders.
18. It is expected that the petitioner shall file reply within a period of 30 days from the date of receipt of a copy of this order together with above deposit. The respondent shall thereafter pass fresh orders on merits and in accordance with law as expeditiously as possible preferably within a period of two months. Needless to state, the petitioner shall be heard before passing the order.
These Writ Petitions are disposed of with above directions. No costs. Consequently, connected miscellaneous petitions are closed.