Eastern Roller Flour Mills (P) Ltd. Vs State of Assam And 5 Ors. (Gauhati High Court)
In the case Eastern Roller Flour Mills (P) Ltd. vs State of Assam and Others, the Gauhati High Court addressed a group of writ petitions challenging the collection of cess under the Assam Agricultural Produce Market Act, 1972 following the implementation of the GST regime. The petitioners argued that the collection of such cess by the respondent authorities was unlawful after the introduction of the Central Goods and Services Tax Act, 2017 (CGST Act) and the Assam Goods and Services Tax Act, 2017 (AGST Act), citing the specific exemption notifications issued by both central and state governments in June 2017. These notifications clarified that services provided by Agricultural Produce Marketing Committees or Boards were exempt from GST, effectively rendering any further cess collection ultra vires.
The Court referred extensively to its earlier ruling in Bhater Traders and Another vs State of Assam, where it was held that post-GST cess imposition by the Market Committees was unconstitutional and contrary to the provisions of the CGST and AGST Acts. Although the Court reaffirmed the illegality of the cess collection during the period from July 1, 2017, to June 12, 2020, it declined to issue a refund directive to the petitioners. The decision was grounded in the legal principle that refund claims must establish that the financial burden was not passed on to consumers—a requirement the petitioners failed to meet in their pleadings.
