Arumugam Vs Commissioner of GST & Central Excise (Madras High Court)
The Madras High Court dealt with a writ appeal concerning the classification of a tobacco product under GST. The appellant, engaged in the tobacco business, undertook a process involving purchase of raw dried tobacco leaves, removal of stems and dust, curing the leaves using jaggery-water (liquoring) to prevent decay, cutting the leaves into small pieces, and packing them for sale.
The appellant contended that the product should be classified under CETH 2401 20 90 (raw tobacco), while the department classified it under CETH 2403 99 10 as “manufactured chewing tobacco.” The Authority for Advance Ruling and the Appellate Authority for Advance Ruling upheld the department’s view. A writ petition challenging these rulings was dismissed by a Single Judge, leading to the present appeal.
The Court noted that advance rulings under the CGST Act are binding on the applicant and jurisdictional authorities, but can be challenged under Articles 226/227 of the Constitution. However, judicial review in such cases is limited to examining jurisdictional errors, legal errors, adherence to natural justice, and perversity, rather than re-evaluating the merits.
The Court also referred to precedents stating that if two views are possible, the High Court should not substitute its own view in judicial review. It further directed that challenges to advance rulings should be heard by a Division Bench.
