Krishna Pharmaceutical And Surgicals Agencies Vs Principal Commissioner Central Goods And Services Tax And Central Excise Lko. And Another (Allahabad High Court)
Allahabad High Court has ruled that circulars issued by the Goods and Services Tax (GST) Council are binding on the tax department. The court quashed demand orders issued against Krishna Pharmaceutical And Surgicals Agencies by the Principal Commissioner, Central Goods and Services Tax and Central Excise, Lucknow, for allegedly ignoring the Council’s clarificatory circulars.
The case involved two writ petitions filed by Krishna Pharmaceutical challenging orders dated November 21, 2024, which confirmed a demand under Section 74 of the GST Act and levied a demand for Integrated Goods and Services Tax (IGST) along with a penalty.
The counsel for the petitioner argued that the demand was raised on goods falling under HSN (Harmonized System of Nomenclature) heading 9021, and that clarificatory circulars issued by the GST Council on August 1, 2023, and October 11, 2024, regarding the duty applicability on these goods, were not considered by the assessing authority. The counsel asserted that the impugned order, passed on November 21, 2024, was in direct contradiction to these existing circulars.
Representing the respondents, the counsel argued that the petitioner should have pursued the statutory appeal mechanism under Section 107 of the GST Act. Furthermore, the respondent’s counsel contended that it was the petitioner’s responsibility to present the relevant circulars to the adjudicating authority, a burden they allegedly failed to discharge. The applicability of the circulars, according to the respondent, could only have been determined if they had been brought to the authority’s notice.
