Union of India & Ors. Vs Girish Pravinbhai Rathod (Jay Ambey) & Anr. (Supreme Court of India)
Supreme Court has upheld a Gujarat High Court decision on the Goods and Services Tax (GST) classification of “fusible interlining fabric of cotton.” The apex court dismissed a Special Leave Petition filed by the Union of India, affirming the High Court’s ruling that the fabric should be classified under Chapters 50 to 55, 58, or 60 of the Custom Tariff Act, 1975, rather than Heading 5903 of Chapter 59.
The dispute originated from an advance ruling and its subsequent confirmation, which had initially classified the fabric under Heading 5903, typically covering textile fabrics impregnated, coated, or laminated with plastics. Girish Pavinbhai Rathod (Jay Ambey), the manufacturer, challenged this classification. The crux of the argument centered on the interpretation of Chapter Note 2(a) of Chapter 59, which excludes certain fabrics from Heading 5903, particularly those where the coating is not visible to the naked eye.
The Gujarat High Court found that the appellate authority had misapplied the classification criteria and misinterpreted the ATIRA (Ahmedabad Textile Industry’s Research Association) test report. The ATIRA report clearly indicated that the fabric’s coating was “partial in nature” and resulted in a “dot matrix printing process,” making it partially coated or covered with plastics. The High Court emphasized that such partial coating would preclude its classification under Chapter 59, pushing it into the broader Chapters 50 to 55, 58, or 60.
In its decision, the High Court also considered judicial precedents, including a Madras High Court ruling that had set aside a relevant circular, and a decision by the Uttarakhand Advance Ruling Authority in the case of M/s. Goods Wear Fashion Ltd. This Uttarakhand ruling similarly classified a partially plastic-covered fabric outside HSN Code 5903. Citing these precedents and the ATIRA report, the Gujarat High Court concluded that the earlier classification was unsustainable and quashed the impugned order. The Supreme Court, in turn, found no merit in the Union of India’s appeal, dismissing it on grounds of significant delay and a lack of substantive merit.
Read HC Judgment: Fusible interlining fabric of cotton falls under Chapters 50-55, 58 or 60: Gujarat HC
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
