1 10.04.2025 sb Ct 5 IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION APPELLATE SIDE WPA 18295 of 2024 M/s. Duakem Pharma Private Limited & Anr. Versus The Deputy Commissioner of Revenue, & Ors. Mr. Ankit Kanodia Ms. Megha Agarwal Mr. Piyush Khaitan … For the petitioners. Mr. Anirban Ray, Ld. GP, Mr. T. M. Siddiqui, AGP Mr. T. Chakraborty Mr. S. Sanyal … For the respondents. 1. Challenging the order passed under Section 73 of the Central/West Bengal Goods and Services Tax Act, 2017 (hereinafter referred to as the “said Act”) dated 29th April, 2024, for the tax period April, 2018 to March, 2019, the instant writ petition has been filed. 2. The short point that falls for consideration in the present writ petition is whether respondents in the show cause dated 29th December, 2023 under serial no.3 having indicated that the ITC found reversible in proportion to exempt supply of Rs.14,07,127.84, concerning IGST and Rs.3,08617.56 for CGST and SGST each, whether the proper officer could have concluded that the petitioners were liable to tax on the assessable value of the outward supply on inward receipt of taxable goods, received from Narmada Gelatines Ltd. (Kolkata) and Alivira Animal Health 2 Limited, since the aforesaid determination and fastening of liability on the petitioners on the basis of the assessable value of the outward supply on inward receipt of taxable goods do not find place in the show cause. It would also transpire from the records that the liability fastened under the aforesaid ground is higher than the figure in the show cause. 3. To morefully appreciate the scope of this challenge the relevant portion of the show-cause and the finding thereon by the proper officer are extracted hereinbelow: “Show-cause ... (ii) Regarding ITC found reversible in proportion to exempt supply: IGST ITC Rs.1407127.84, CGST ITC and SGST ITC each Rs.308617.56 – Your reply provided no satisfactory and eligible explanation. So you are liable to reverse this ITC on this discrepancy as such IGST ITC Rs.1407127.84, CGST ITC and SGST ITC each Rs.308617.56.” “Finding In their outward supply invoices, as furnished by you, NARMADA GELATINES LTD. (KOLKATA) mentioned description of goods as DCP (Poultry Feed) with its HSN as 2309 and not charged any GST. Now, as derived from different sources, it appeared that Di Calcium Phosphate, commonly known as DCP, is chemically an insoluble inorganic diluents. Among different usage, it is used in the food industry. It is commonly used as 3 a dietary supplement and as a source of both calcium and phosphorus. Therefore DCP is not accepted as Poultry Feed, as it is a dietary supplement, rather this goods is accepted as feed supplement. The CBIC declared tax rate as Nil on “Dicalcium phosphate (DCP) of animal feed grade conforming to IS specification No.5470: 2002 bearing HSN 2835”. But in your inward invoices neither the name of the goods and HSN did match, nor there is mentioned the IS specification No.5470: 2002. As description of goods did not match with HSN and IS specification is not mentioned, so it is not accepted that Dicalcium Phosphate (DCP) is an exempted goods, rather it is accepted as a taxable goods, taxable @ 12% as fixed by the GST Council on 18.05.2017. You are therefore liable to pay tax on all outward supplies of Dicalcium Phosphate (DCP) as received from NARMADA GELATINES LTD. (KOLKATA). In absence of proper documents and as found in the GST Back Office that you have no additional place of business/warehouse, so it is accepted that out of inward supply of Rs.21169512.00, you have made outward supply 95% of it amounting to Rs.20111036.40 with a profit margin of 10%. So your assessable value of outward supply on inward receipt of taxable goods from NARMADA GELATINES LTD. (KOLKATA) is determined at Rs.22122140.00. You are liable to pay tax @ 12% on this Rs.22122140.00 along with applicable interest. In their outward supply invoices, as furnished by you, Alivira Animal Health Limited mentioned description of three items, namely, (i) R.SONE 20%, (ii) EVOTOX and (iii) CITRINAL with the same HSN for all these as 23099090 but charged no GST. 4 Searching in the home page of Alivira Animal Health Limited found EVOTOX and CITRINAL as Animal Feed Supplement, but there did not found any entry of “R.SONE 20%”. Therefore, there is no evidence that these goods are exempt goods under the GST Acts. Further in your outward supplies found no supply of goods with HSN 23099090. So the goods namely (i) R.SONE 20%, (ii) EVOTOX and (iii) CITRINAL are accepted as taxable goods. You are liable to pay tax on all outward supplies of (i) R.SONE 20%, (ii) EVOTOX and (iii) CITRINAL @12% as fixed by the GST Council on 18.05.2017 as received from Alivira Animal Health Limited. In absence of proper documents and as found in the GST Back Office that you have no additional place of business/warehouse, so it is accepted that out of inward supply of Rs.2651032.64, you have made outward supply 95% of it amounting to Rs.2518481.00 with a profit margin of 10%. So your assessable value of outward supply on inward receipt of taxable goods from Alivira Animal Health Limited is determined at Rs.2770329.00. You are liable to pay tax @12% on this Rs.2770329.00 along with applicable interest. Further as per your supply details as found in the Records you have supplied goods bearing HSN 2306 by charging tax @0% on it. But under the GST Acts, goods with HSN 2306 is taxable @5%. Now, as per E-waybill data Assessable value of Outward supply is Rs.1,69,76,970.00, whereas you have disclosed taxable outward supply in Form GSTR 1 as Rs.1,41,94,866.00, thereby made short disclosure of outward supply of taxable goods worth Rs.27,82,104.00. It is therefore accepted that this anomaly arose due to supply of goods bearing HSN 2306 by generating E-waybills 5 but without charging tax on it. This undisclosed taxable Turnover Rs.27,82,104.00 is accepted as bearing HSN 2306 and is charged with tax @5%.” 4. In view of the above, and upon hearing the learned advocates appearing for the respective parties since, it would appear from the materials on record that no show cause in relation to fastening of liability on assessable value of the outward supply on inward receipt of taxable goods was made, the aforesaid determination and/or fastening liability to the above extent whereby the proper officer had determined a sum of Rs.13,27,328.40 i.e. @ 12% on the assessable value of the outward supply on Rs.2,21,22,140.00 in relation to Narmada Gelatines Ltd. (Kolkata) and Rs.1,66,219.74 for CGST and SGST @12% on Rs.27,70,329.00 being the assessable value of the outward supply on inward receipt of taxable goods in respect of Alivira Animal Health Limited, appears to be beyond the show cause, and Rs.69552.60 on account of CGST and WBGST @5% in respect of other supplies on the basis of the data available with him which also do not find place in the show cause, in my view, cannot be sustained and the same are accordingly set aside. 5. The aforesaid, however, shall not impede upon the rights of the respondent authorities to initiate a fresh proceeding on the basis of their assertion as available in the aforesaid order, if so advised, in accordance with 6 law. 6. The period between 29th April, 2024 being the date of order under Section 73 of the said Act and 10th April, 2024 being the date of disposal of the writ petition, or the date of receipt of certified copy of this order whichever is later, shall stand excluded while computing the period of limitation for initiation of any proceeding against the petitioners. 7. With the above observations and directions, the writ petition stands disposed of. Urgent Photostat certified copy of this order, if applied for, be made available to the parties upon compliance of requisite formalities. (Raja Basu Chowdhury, J.)