The exclusion of ice cream from GST Composition Scheme benefits was found arbitrary; the GST Council must consider tax implications and fairness in decision-making.

JUDGMENT

[VIA VIDEO CONFERENCING]

Rajiv Sahai Endlaw, J. The petitioner, claiming to represent the interest of more than 50 small scale ice cream manufacturing units operating in the National Capital Territory of Delhi, has filed this petition impugning the decision dated 18th June, 2017 of the Goods and Services Tax Council (GST Council), in exercise of powers under Section 10 (2)(e) of the Central Goods & Services Tax Act, 2017, of exclusion of ice cream from the benefits of Composition Scheme under Section 10 of the Act. It is the contention of the petitioner that the said exclusion is in violation of the spirit of Articles 14 and 19 of the Constitution of India and against the principles of natural justice.

2. The petition was entertained and notice thereof issued.

3. The counsel for the respondent no.2 GST Council states that she has filed a counter affidavit yesterday only. The same has not come on record.

4. Considering the issue and its urgency, since the season of optimum sale of ice cream is on the anvil, we have asked the counsel for the petitioner, whether he desires to file any rejoinder to the counter affidavit. The counsel for the petitioner replies in the negative. We have next enquired from the counsel for the respondent no.2 GST Council, whether she is in a position to argue the petition today itself. She replies in the affirmative. The counsel for the petitioner however states that in the prayer paragraph of the petition, a inadvertent mistake has occurred and which requires amendment/correction. It is stated that challenge is being made to the minutes of the Sixteenth meeting of the GST Council also and which remained to be made. The counsel for the respondents, on enquiry fairly states that she is not taking any technical pleas and the mistake may be ignored. We have thus proceeded to hear the counsels.

5. Section 10 (1) of the Act, notwithstanding anything to the contrary contained in the Act, provides that a registered person whose aggregate turnover in the preceding financial year did not exceed Rs.50,00,000/- may opt to pay, in lieu of the tax payable by him under Section 9 (1) of the Act, an amount of tax calculated at such rate as may be prescribed but not exceeding the maximum laid down in the said provision. The first proviso to Section 10 (1) of the Act empowers the Government to, by notification, increase the limit of Rs.50,00,000/- to such higher amount not exceeding Rs.1,50,00,000/-, as may be recommended by the GST Council. Section 10 (2)(e) of the Act however empowers the Government to, on the recommendation of the GST Council, notify goods manufacturers whereof though eligible for availing the benefit of Section 10 (1), would cease to be eligible to such benefit.

6. The counsel for the petitioner informs that the limit aforesaid of Rs.50,00,000/- was successively increased to Rs.75,00,000/- and Rs.1,50,00,000/-. It is further informed that the respondent no.2 GST Council, in its Seventeenth Meeting held on 18th June, 2017, in exercise of powers under Section 10 (2)(e) of the Act, has recommended notification of ice cream and in pursuance to the said recommendation, ice cream has been notified, resulting in the small manufacturers of ice cream having turnover of less than Rs.1,50,00,000/- per annum being not entitled to take the benefit of Section 10 (1) of the Act and have to necessarily go under the regime of Section 9 of the Act and to comply with all the requirements.

7. The counsel for the respondent no.2 GST Council states that another petition pertaining to ice cream, claiming the same relief as in