The Gujarat High Court comprising Justice Bhargav D. Karia and Justice D.N.Ray has granted ad interim relief to Balaji Wafers in a writ petition challenging a ₹172 crore GST demand.
The dispute centers around the classification of ‘Namkeen’ as extruded snack pellets, which, as per CBIC circulars, attract 18% GST.
The controversy stems from the CBIC’s clarification regarding the GST applicability on extruded snack pellets in their ready-to-eat form. The tax authority classified these under HSN 1905, subjecting them to a higher 18% GST rate. However, Balaji Wafers has challenged this classification, arguing that its products fall under HSN 2106, which covers food preparations not elsewhere specified and attracts a lower GST rate.
The petitioner, Balaji Wafers has contested the legality of CBIC circulars, claiming that the circulars are ultra vires and lack legal authority. They contradict various judicial rulings, including those upheld by the Supreme Court. The insertion of Entry 32C through Notification No. 5/2024 is being misapplied in their case. The nature, nomenclature, and ingredients of their products align with HSN 2106, rather than HSN 1905, as asserted by the tax authorities.
The Gujarat High Court has allowed the adjudication proceedings to continue. However, it has imposed a restriction on passing any final order against Balaji Wafers without the court’s permission. This interim relief provides a temporary safeguard to the petitioner while the legal proceedings continue.
Case Details
Case Title: Balaji Wafers Private Limited & Anr. Versus Union Of India & Ors.
Case No.: In R/Special Civil Application No. 666 Of 2025 With R/Special Civil Application No. 666 Of 2025
Date: 29/01/2025
Counsel For Petitioner: Krutarth K Desai
Counsel For Respondent: Maunil G Yajnik
