GST Classification Dispute Over Flavoured Milk: Madras HC Directs Britannia to Approach Appellate Authority [Read Order]

The company had approached the Court through a writ petition, seeking a directive to classify the product under Tariff Heading 0402, which pertains to milk and cream, rather than Chapter 22, which typically covers beverages and preparations containing milk.

Britannia argued that flavoured milk, being essentially milk with added flavour, falls squarely under Chapter 4 of the Customs Tariff Act, 1975.

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The petitioner relied on a binding precedent from the Andhra Pradesh High Court in the Sri Vijaya Visakha Milk Producers Company Ltd. v. Assistant Commissioner of Central Tax, where a Division Bench had ruled in favour of the 0402 classification for flavoured milk.

Additionally, Britannia stated that their previous application was denied in 2021 by the Tamil Nadu State Appellate Authority for Advance Ruling (AAAR). The company also sought to unfreeze its bank account, which had been attached by GST authorities.

During the hearing, the Special Government Pleader representing the Commercial Taxes Department submitted that since the AAAR had already issued an adverse ruling, the appropriate remedy for the petitioner would be to pursue relief through the appellate route.

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Justice Krishnan Ramamsamy held that the petition was premature and directed Britannia to file a detailed representation before the designated appellate authority within two weeks. In turn, the authority was directed to decide on the representation within four months from the date of its receipt.

The court also instructed the concerned GST authorities to issue appropriate directions to Britannia’s bankers for de-freezing of the company’s bank account.

Adv. Vijay Narayan Senior Counsel appeared for the company.

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