Manipal Technologies Ltd Vs State of Karnataka (Karnataka High Court)
HC held that authority for Advance Ruling and the Appellate Authority for Advance Ruling have rightly given a ruling that ’Pattadar Pass Book cum Title Deed’ is classifiable under HSN 4820 and it is not a document classifiable under HSN 4907.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
In this petition the petitioner has sought for the following reliefs:
i. issue a writ of certiorari or any other writ, order or direction quashing the impugned order No. KAR/AAAR 14-A/2019-20 dated 04.02.2020 at Annexure – A;
ii. hold that the Pattadar pass book cum title deed merits classification under Tariff Entry 4907 00 90 and Goods and Services Tax is to the paid at the rate of 12% and not at the rate of 18%;
iii. any other writ, order or direction as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case and allow this petition with cost.
2. Heard Sri. Ravi Raghavan and Sri. Sudeshna Bannerjee, learned counsel for petitioner, Smt. Vanita K.R., learned counsel for respondent Nos. 4 and 5 and Sri. Jeevan J Neeralgi, learned Additional Government Advocate for respondent Nos. 1 and 2.
3. Facts leading to the filing of this writ petition are that the petitioner is engaged in the business of printing books, magazines, calendars, diaries, bank passbooks, bank account opening forms and various other stationery items required for banking industry, educational institutions and various other customers. The petitioner is registered with Goods and Service Tax Authorities vide GST Registration No. 29AABCM516H1Z8. The Government of Telengala through Telengana State Technology Services Limited (hereinafter referred to as TSTS) invited bids for secured printing and delivery of Pattadar Pass Book cum Title Deed to all pattadars and land owners vide tender No. TSTS/CSCCLA-PPB-TD/2017 dated 23.02.2018 on behalf of the Chief Commissioner Land Administration (hereinafter referred to as CCLA). The petitioner participated in the said tender process and being the successful bidder was awarded the contract. The petitioner arranged for the material required for printing and supply of Pattadar Pass Book cum Title Deed as per the agreement entered into with CCLA. The petitioner procured paper and also printed the Pattadar Pass Book cum Title Deed as per the prescribed security features and specifications. The data/content for printing was provided to the petitioner in electronic format by CCLA. The Pattadar Pass Book cum Title Deed is a document of title since it provides ownership details and will serve as document of title from a legal perspective. The petitioner supplied printed Pattadar Pass Book cum Title Deed vide invoice No. KAA8104318 dated 19.05.2018 charging IGST at 12% for SAC 9989. The petitioner filed an application for advance ruling in GST ARA-01 under Section 97 of the CGST Act and KGST Act seeking ruling on “whether the `Pattadar Pass Book cum Title Deeds’ printed by the petitioner for supplies made to the Government of Telengana are classifiable as `Document of Title’ under HSN 4907 or as `passbook’ under HSN 4820”. The application made by the petitioner was disposed of by the Authority for Advance Ruling, Karnataka vide order dated 16.09.2019 wherein it was held that the Pattadar Pass Book cum Title Deed is not a document of title and accordingly classifiable under HSN 4820 attracting Goods and Service Tax at 18% instead of 12% as paid by the petitioner. The Authority for Advance Ruling, Karnataka held that document of title is the document registered with the authority under the Registrations Act, 1908 and the passbooks are mere reflections of the same; that pattadar passbook is not a document of title inasmuch as the record of rights in the office of the Mandal Revenue Officer is the actual record of title and ownership of land; the passbook enable the passbook holder to avail several government schemes without having to resort to obtain certificates from the Revenue Officer at frequent intervals, the passbook and the title deed in the hand of the owner is not the ultimate document of title.
4. Aggrieved by the said order dated 16.09.2019 the petitioner filed an appeal before the Appellate Authority under Section 100 of the CGST Act/KGST Act. The Appellate Authority has passed the impugned order dated 04.02.2020 upholding that the Pattadar Pass Book cum Title Deed is not a document of title and not classifiable under Chapter Heading 4907 of the Customs Tariff Act, 1965 (for short CT Act) and appropriately classified under Chapter Heading 4820 of the CT Act. The petitioner received the said order on 10.07.2020. The petitioner has challenged the said order dated 04.02.2020 passed by the Appellate Authority for Advance Ruling, Karnataka, under Section 100 of CGST Act/KGST Act in the present writ petition.
5. Learned counsel for the petitioner would contend that the Pattadar Pass Book cum Title Deed is not covered under any of the specific entries and hence its classification under Tariff Entry 4907 00 90 is appropriate. Pattadar Pass Book cum Title Deed is ultimately used by a Pattadar in relation to agricultural land and therefore the classification of such passbook as a document of title or otherwise has to be understood in the context of various land disputes. The Pattadar Pass Book cum Title Deed confers ownership of entitlement to certain financial interests or benefits named in such deed. As per the details in scope of work at page No. 20 of the tender document it is clear that Pattadar Pass Book cum Title Deed is a document in the form of a small bound book containing the details of land owned by a person (pattadar). This Pass Book cum Title Deed is issued by Revenue Department and it contains details of land ownership, photo and change of ownership. The value of the land would exceed the cost of printing of the Pass Book cum Title Deed and the same can be classified under Chapter head 4907 of the CT Act. The Appellate Authority for Advance Ruling has completely disregarded the decisions relied upon holding that the decisions would not be relevant in the context of classification of the subject `Pattadar Pass Book cum Title Deed’ under CT Act as they were rendered in the context of settling land disputes. The activity undertaken by the petitioner is passbook printing keeping in view the security guidelines issued by the Government of Telengana as per the tender document. Without these details pass books cannot be used for the purpose of recording transactions. Therefore, printing of pass books can not be considered incidental. It is his further submission that Pattadar Pass Book cum Title Deed can not be reduced to a mere pass book of general use and classified under Entry 4820. The Appellate Authority for Advance Ruling has failed to consider the provisions of the Telengala Rights in Land and Pattadar Passbooks Act, 1971, with its allied Rules in its entirety and has resorted to selective reading of provisions to conclude the classification of such Pattadar Pass Book cum Title Deeds under HSN 4820. He further argued that in several civil disputes the Courts have considered Pattadar Pass Book cum Title Deed as a document of title. He placed reliance on the following decisions:
i. Rajeshwari Home Developers India (P) Ltd., Vs. The District Revenue Officer, Thoothukudi District and others, MANU/TN/0199/2019
ii. Salapu Ramanna and others Vs. Salapu Sanyasi Rao, 2013 SCC Online AP 648
iii. District Collector and others Vs. Harikishan Agarwal and others, 2001 SCC Online AP 831
iv. Gurunath Manohar Pavaskar and others Vs. Nagesh Siddappa Navalgund and others, (2007) 13 SCC 565
6. Learned counsel for respondent Nos. 4 and 5 and the learned Additional Government Advocate for respondent Nos. 1 and 2 have supported the reasoning assigned by the Advance Ruling Authority and the Appellate Authority for Advance Ruling and submitted that the Pattadar Pass Book cum Title Deed is not a document of title and it is only a revenue record and the entries made in the revenue records cannot form the basis for declaration of title. They have further contended that the authority for Advance Ruling and the Appellate Authority for Advance Ruling have rightly classified the Pattadar Pass Book cum Title Deed under Chapter head 4820. They further contended that the decisions relied upon by the learned counsel for the petitioner are rendered in civil property disputes and they will not help the petitioner in contending that the Pattadar Pass Book cum Title Deed is a title deed and it comes under the head 4907.
7. We have carefully considered the submissions made by the learned counsel for the parties and also gone through the records of the case.
8. The issue before us is regarding the classification of ` Pattadar Pass Book cum Title Deed’ “Whether it is a document of title classifiable under HSN-4904 as claimed by the petitioner or it is an article of stationary classifiable under HSN-4820 as held by the authority for Advance Ruling and the Appellate Authority for Advance Ruling.
9. Pattadar Pass Book cum Title Deed is a document in the form of a small bound book containing the details of land owned by a person (Pattadar), Photo identity of Pattadar and changes of ownership subsequent to the issue of Pattadar Pass Book cum Title Deed. This Pattadar Pass Book cum Title Deed is issued by Revenue Department under the law called Record of Rights Act (for short `RR Act’).
10. The activity of printing involves both supply of goods and services which is recognized as ‘Composite supply’ in terms of the definition under Section 2(30) of the CGST Act, 2017. Further Section 8 of the CGST Act, 2017 determines taxability of composite supply which states that ‘a composite supply comprising two or more taxable supplies, one of which is a principal supply, shall be treated as a supply of such principal supply’ as goods or service would depend on which supply is the principal supply. The Circular No.11/11/2017-GST dated 20.10.2017 issued by the CBEC wherein it is clarified that in printing activity, where only content is supplied by the publisher or the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belong to the printer, supply of printing [of the content supplied by the recipient of supply] is the principal supply and therefore such supplies would constitute supply of service falling under heading 9989 of the scheme of classification of services. Rate of tax on supply of service is provided in Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended. The relevant portion of the Notification is extracted hereunder:
