J.K. Papad Industries & Anr. Vs Union of India & Ors. (Gujarat High Court)
In the case of J.K. Papad Industries & Anr. Vs Union of India & Ors., the petitioners, J.K. Papad Industries and another entity, challenged a show cause notice issued by the Central Goods and Services Tax (CGST) authorities. This notice, dated February 7, 2024, was issued under Section 74 of the Central/Gujarat Goods and Services Tax Act, 2017 (the GST Act), concerning the classification and taxation of their product, specifically unfried or uncooked snack pellets. The petitioners argued that the notice was issued without jurisdiction and contested the classification of their product under the Harmonized System of Nomenclature (HSN) codes.
Facts of the Case
J.K. Papad Industries is a company engaged in manufacturing edible food products, including unfried fryums, which are prepared using a process involving extrusion. The production process includes mixing various cereals and pulses with starch, salt, and preservatives. This mixture is cooked, extruded into shape, dried, and packaged for sale.
Prior to the implementation of the GST regime on July 1, 2017, these fryums were classified as ‘Papad’ under the Gujarat Value Added Tax (VAT) Act, 2003, as per judgments from the Gujarat VAT Tribunal. However, with the advent of GST, there was confusion over the proper classification of such products. In response to this ambiguity, M/s Sonal Products sought an advance ruling under Section 97 of the GST Act, which concluded that unfried fryums should be classified under a different heading, specifically under HSN 19059030, attracting a GST rate of 18%.
