GST
TRT-2025-
Calcutta High Court
Date:-06-05-25
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 06 May 2025
Parties: M/s Harsh Polyfabric Pvt. Ltd. Vs Union of India & Ors.
Key Pointers –
- The Petitioner, M/s Harsh Polyfabric Pvt. Ltd., had classified PPSB bed sheets produced in a finished state by processing the non-woven fabric in Chapter 63 and HSN code 63041930 and had, accordingly, submitted the return charging 5% GST on its sales value.
- The Appellate Authority held that PPSB bed sheets should be considered in Chapter 5603 at par with non-woven fabric to be taxed at the rate of 12% instead of 5% and accordingly, the order rejecting the refund was modified.
- The case concerns classification of PPSB bed sheets under the GST Tariff for the purpose of tax rate and refund eligibility.
- The Hon’ble High Court observed that the Appellate Authority had misread the second note in Chapter 63 of the Tariff Act, while proceeding to determine the appeal by using the word “articles made of Chapter 56 to 62” by wrongly substituting the word “made” which is not contained in the note under the aforesaid chapter, the Appellate Authority has arrived at a finding that the bed sheets in question have to be taxed at 12%.
- It also appears that the Division Bench has taken note of the fact that Chapter heading 6304 which deals with other furnishing articles excluding those of heading 9404, there is a separate heading for bed sheets. Under the said heading in the tariff item 63041930 bed sheets and bed covers of manmade fibres have been specifically mentioned.
- This apart the Division Bench also noted that the Appellate Authority has misread paragraph 2(a) of the Notes of Chapter 63 by substituting the words “goods of Chapter 56 to 62” by “articles made of Chapter 56 to 62”. This has led to an inherent wrong decision in holding that the PPSB Bed Sheets is to be considered in Chapter 5603 and to be taxed at 12% instead of 5% as claimed by the appellant.
- The refund applications filed by the petitioner to the extent the same treats the non-woven fabric to be taxed at 12% instead of 5% also stands modified in terms of the observation made herein.
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