ITC Limited Vs Union of India (Karnataka High Court)
Karnataka High Court has issued an interim order staying further proceedings initiated against ITC Limited, including a show cause notice and a corrigendum, as well as a specific paragraph of a circular issued by the Union Government concerning the classification of “extruded snack pellets in ready-to-eat form” under GST.
The court’s decision, delivered during a hearing on July 29, 2024, and subsequently reaffirmed on August 12, 2024, addresses a petition filed by ITC Limited. The company is challenging the show cause notice issued by the Directorate General of GST Intelligence (DGGI), Bengaluru Zonal Unit (respondent No. 4), and a circular from the Ministry of Finance, Department of Revenue (respondent No. 1), which it claims is contrary to established legal precedents and the Central Goods and Services Tax Act, 2017 (CGST Act).
The Core of the Dispute
ITC Limited, represented by Senior Counsel, argued that the goods it manufactures, specifically “extruded snack pellets in ready-to-eat form,” should be classified under HSN 2106 (Entry No. 1905 of Schedule III of rate notification No. 01/2017-Central Tax(Rate) dated June 28, 2017). The respondents, however, sought to classify them under HSN 1905 (Entry No. 16 of Schedule III), a classification ITC disputes.
