Factual GST Classification Dispute Not Adjudicable Under Article 226: Kerala HC

SEO Title: Kerala HC Dismisses GST Writ by Neo Classic Cruise & Tours

Summary: The Kerala High Court dismissed the writ petition filed by Neo Classic Cruise and Tours (P) Ltd. challenging an order issued under Section 74 of the CGST Act, 2017. The company, which provides tour packages including cruises, had classified itself as a tour operator subject to a 5% tax. However, tax authorities issued a show-cause notice in July 2024, contending that the petitioner should have been classified as a houseboat service operator, subject to an 18% tax. The petitioner argued that invoking Section 74 was improper, as there was no fraud, willful misstatement, or suppression of facts. Additionally, it claimed that the order was issued unilaterally without verifying records, violating principles of natural justice.

The government, however, maintained that the order was appealable under Section 107 and that specific reasons for invoking Section 74 were detailed in the order. The High Court observed that the disputed classification required a factual determination, which could not be adjudicated under Article 226. The court also noted that while CBIC Instruction No. 05/2023 restricts Section 74 to cases involving fraud or suppression, the statutory appeal process must be followed. Concluding that the petition lacked merit, the court dismissed the case, directing the petitioner to seek appropriate remedies through statutory appeals.