Dharti Industries Vs Office of Commissioner (Appeal) & Ors. (Gujarat High Court)
Cotton Seed Oil Cake Exempt from GST as Cattle Feed Irrespective of Supply Route so far as the End Use is Exempted: Gujarat High Court
The Gujarat High Court held that cotton seed oil cake used as cattle feed is exempt from GST under Entry 102 of Notification 2/2017, irrespective of whether it is supplied directly to end users or to traders, as long as the end use remains cattle feed. The Court noted that the product has no commercial use other than as cattle feed, continuing the exemption available under the VAT regime. Audit objections claiming that cotton seed oil cake sold to traders amounted to taxable trading were rejected, as traders themselves confirmed its exclusive use as cattle feed. The Court held that the supply route cannot determine taxability when end use is undisputed. It quashed the adjudication and appellate orders, holding the exemption applicable from 1 July 2017 and, more specifically, from 22 September 2017 upon insertion of Entry 102A, without deciding on retrospective operation. The ruling affirms that end-use governs exemption, not the identity of the purchaser.
Facts:
Dharti Industries (“the Petitioner”) is a partnership firm engaged in manufacturing cotton seed oil cake by extracting cotton seed oil, registering for GST and supplying oil cake to traders and customers as cattle feed.
