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2024 Supreme(Online)(MAD) 20449
HIGH COURT OF MADRAS
Hon`ble Mr.Justice C.SARAVANAN
Tvl. Vibis Natural Bee Farms – Appellant
Versus
The Deputy State Tax Officer – Respondent
Live honey bees are exempt from GST, and packing materials are part of a composite supply with the exempted product.
Headnote:
Tax - Live Honey Bees - GST Act - Sections 2(30), 8(a), 107 - The court found the sale of live honey bees exempt from GST, treating the packing materials as part of a composite supply. The respondent's assessment orders were set aside to allow for a fresh determination.
Fact of the Case:
The petitioner, a dealer in live honey bees, challenged assessment orders for several fiscal years, asserting lack of awareness of proceedings and arguing that the sale of honey bees is tax-exempt under the GST Act, 2017.
Issues: Whether the sale of live honey bees is exempt from GST and if the assessed tax on packing materials was justified under the GST framework.
Ratio Decidendi: The court concluded that as the sale of live honey bees is exempt, the packing materials are integral to the principal supply, affecting how the GST applies.
Final Decision: The impugned orders were quashed, pending a fresh determination post deposit by the petitioner.
COMMON ORDER
By this common order, these four Writ Petitions are taken up for disposal.
2. Heard the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent.
3. The petitioner claims to be a dealer in selling live honey bees. In these Writ Petitions, the petitioner has challenging the respective assessment orders passed for the assessment years 2018-19 to 2021-22 as detailed below:
| S.No | W.P.(MD)Nos. | Assessment year | Assessment order/ dated | Demand Rs. |
| 1. | 17237/2024 | 2020-21 | 33AIBPJ3432C1Z1/2020-21/ 31.07.2023 | 8,61,634 |
| 2. | 17238/2024 | 2021-22 | 33AIBPJ3432C1Z1/2021-22/ 31.07.2023 | 5,23,488 |
| 3. | 17239/2024 | 2019-20 | 33AIBPJ3432C1Z1/2019-20/ 01.08.2023 | 6,94,948 |
| 4. | 17240/2024 | 2018-19 | 33AIBPJ3432C1Z1/2018-19/ 31.07.2023 | 4,05,458 |
4. The case of the petitioner is that the petitioner is a small time operator and was unaware of the notices that preceded the respective assessment orders and thus, failed to participate in the proceedings before the respondent, which is culminated in the impugned order.
5. It is submitted that for the same reason that the petitioner was also unaware of the impugned orders passed as detailed above, the petitioner has failed to approach this Court at an earlier point of time.
6. Specifically, the learned counsel for the petitioner submits that the petitioner is engaged in sale/supply of live honey bees, which is exempted from tax in terms of serial No.6 to the Schedule 1 to the GST Act, 2017.
7. It is submitted that the respondent has treated the value of the packing material for selling live honey bees as a value of supply and has demanded tax from the petitioner.
8. In this connection, the learned counsel for the petitioner has drawn attention to Section 8(a) of the respective GST enactments, in which, in terms of composite supply comprising two or more supplies, one of which is a principal supply shall be treated as a supply of such principal supply.
9. It is submitted that the petitioner cannot be mulcted with the tax on the value of packing material as the petitioner is engaged in sale of live honey bees.
10. The learned counsel for the petitioner submits that the petitioner is willing to abide by the reason with conditions, which the Court may impose so that the petitioner can explain the case afresh before the respondent.
11. On the other hand, the learned Additional Government Pleader for the respondent would submit that these Writ Petitions are liable to be dismissed on account of latches, in the light of the decision of the Hon'ble Supreme Court in the case of Assistant Commissioner (CT) LTU, Kakinada and others vs. Glaxo Smith Kline Consumer Health Care Limited reported in 2020 SCC Online SC
440.
12. It is submitted that the appellate remedy is also time barred in terms of limitation under Section 107 of the respective GST Enactments as held by the Hon'ble Supreme Court in the case of Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others reported in (2008) 3 SCC 70 and submitted that these Writ Petitions are liable to be dismissed.
13. Having considered the submissions made by the learned counsel for the petitioner and learned Additional Government Pleader for the respondent, the Court is of the view that the petitioner has made out prima facie case as the live honey bees traded by the petitioner may not be liable to GST in terms of Schedule 1 of the GST Act, 2017. The Schedule has been downloaded by the petitioner from the Central Board of Indirect Taxes and Customs website.
14. As far as the packing materials are concerned, it appears to be a part of the composite supply with the exempted product as defined in Section 2(30) read with Section 8(a) of the respective GST enactments.
15. Thus, in my view, the petitioner has made out a prima facie case on merits and warranting interference. Further, the petitioner has neglected in not responding to the respective notices that preceded the respective impugned orders.
16. Considering the same, t
