Facts of the Case

The petitioner, a manufacturer of Fruit Pulp (Mango Pulp) registered under GSTIN No.37AAMCS995H1ZL, challenged an assessment order in Form GST DRC-07 dated 30.07.2022 (Order No.ZH370722OF80604) for the tax period 2017-18 to 2020-21, along with a confirming endorsement dated 27.03.2023. The tax authorities had levied GST on mango pulp at 18% instead of 12%, a rate the petitioner claimed was clarified by the Central Government itself. The petitioner relied on an earlier Division Bench order of the same High Court in W.P.No.17267 of 2022, which had examined an identical question and a CBIC Circular dated 03.08.2022 clarifying the GST rate applicable to mangoes and mango pulp under CTH 0804.

Issues Involved

  1. Whether GST on mango pulp is leviable at 12% or 18% under Notification No.1/2017-Central Tax (Rate).
  2. Whether the CBIC Circular dated 03.08.2022 clarifying the rate operates retrospectively to cover the tax period 2017-18 to 2020-21, prior to the circular's date.

Petitioner's Arguments

  • The petitioner relied on the Division Bench ruling in W.P.No.17267 of 2022, which held that mango pulp attracts GST at 12%, not 18%, and requested the same order be passed in this case.
  • The petitioner emphasised the CBIC Circular's own language that the 12% rate on mango pulp "was always meant to be" the applicable rate, showing it merely clarified an existing position rather than creating a new one.

Respondent's Arguments

  • The Government Pleader for Commercial Tax admitted the earlier ruling was applicable and that no appeal had been filed against it.
  • However, it was contended that the Circular dated 03.08.2022 applies only prospectively from its date of issue, and since the tax period involved was 2017-18 to 2020-21, the petitioner could not claim its benefit.

Court Order / Findings

  • The Court held that the Circular's own wording — that the 12% rate on mango pulp "was always meant to be" — shows it is clarificatory in nature, not a fresh levy or reduction, and must be read as declaring the position that always existed.
  • The Division Bench in W.P.No.17267 of 2022 had already held, on facts predating the Circular, that GST on mango pulp is payable at 12%, and this Court found no reason to take a different view merely because the Circular was issued after the assessment period.
  • The Government Pleader's argument that the Circular operates only prospectively was rejected as it would defeat the plain language of the Circular itself.
  • The writ petition was allowed and the impugned DRC-07 order and endorsement confirming the 18% levy were set aside, with no order as to costs.

Important Clarification

A circular that clarifies the rate of tax by stating that a particular classification "was always meant to be" taxed at a certain rate is declaratory in nature and applies to periods before its date of issue, not merely prospectively from the date it is issued. Assessees facing demands based on a higher, later-clarified rate can rely on such circulars regardless of when the disputed tax period falls.

Sections Involved

  • Section 9, CGST Act, 2017 — levy and collection of GST, the basis for classifying goods and their applicable tax rate.
  • Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 (as amended by Notification No.6/2022-Central Tax (Rate)) — prescribes GST rates on goods including mangoes and mango pulp under CTH 0804.
  • Form GST DRC-07 — the summary of the order used to communicate a tax demand following adjudication.

Decision – In Favour of

The decision is in favour of the Assessee. The Court quashed the assessment confirming an 18% GST levy on mango pulp and held that the correct rate is 12% for the entire disputed period, including years prior to the clarificatory circular.

Case Details

Court: High Court of Andhra Pradesh at Amaravati
Case No.: Writ Petition No.13934 of 2023
Coram: Justice U. Durga Prasad Rao and Justice Venkata Jyothirmai Pratapa
Date of Order: 06.09.2023

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