GST Update

 Desk of CA. Praveen Sharma – 997 Series (CAPS) 

ORISSA HIGH COURT IN THE CASE OF Kai International Private Ltd

The case originated from an audit conducted under Section 65 of the GST Act, followed by proceedings under Section 73, resulting in a demand of tax, interest and penalty.

The adjudication order dated 27.08.2024 was challenged before the Appellate Authority under Section 107, which reduced the demand to ?55.62 lakh.

Still aggrieved, the petitioner approached the High Court challenging the classification of the transaction.

The core issue was whether export of iron ore fines with Fe content above 57% qualifies as supply of goods or a composite supply of goods and services.

The petitioner argued that the transaction is purely a supply of goods and cannot be treated as a composite supply.

The department opposed the writ petition on the ground that an alternative remedy before GSTAT under Section 112 is available.

The Court observed that classification disputes involve both factual and legal examination, which should be decided by proper appellate forums.

The Court relied on the judgment of Radha Krishan Industries v. State of Himachal Pradesh (2021) to emphasize that writ jurisdiction should not be exercised when an effective statutory remedy exists.

It was held that High Courts should not act as fact-finding authorities in such matters.

Accordingly, the writ petition was dismissed with liberty to the petitioner to approach the appropriate forum under the GST law.

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Regards
CAPS