Chambal Fertilisers And Chemicals Limited vs. Union Of INDIA

Held

The Court disposed of the writ petition in light of the Supreme Court's judgment in Union of India Vs. Mohit Minerals (Pvt.) Limited. The Court noted that the petitioner was not pressing reliefs related to the constitutionality of Sections 96 and 99 of the CGST/RGST Acts and Rule 103 of the CGST/RGST Rules, nor the challenge to the proviso to Section 5(1) of the IGST Act. For the remaining issues, specifically the challenge to Entry 10 of the notification and the consequential refund of IGST paid, the Court found them covered by the Mohit Minerals judgment. The Supreme Court in Mohit Minerals held that a separate levy on the service aspect of a transaction, which is already included in the composite supply of goods, is impermissible under the GST regime. The Court directed the respondents to grant the refund of IGST paid by the petitioner within six weeks, in accordance with law.

Facts

The petitioner, Chambal Fertilisers And Chemicals Limited, filed a writ petition challenging various provisions of the CGST Act, RGST Act, and IGST Act, as well as notifications and an advance ruling. The petitioner sought to declare certain provisions unconstitutional, quash impugned orders and notifications, and claim a refund of IGST paid. Specifically, the petitioner challenged the constitution of the Authority for Advance Ruling (AAR) and Appellate Authority for Advance Ruling (AAAR), the notification defining 'importer' as the 'recipient' for IGST levy on reverse charge mechanism for imported goods on CIF basis, and the proviso to Section 5(1) of the IGST Act regarding the valuation of imported goods leading to double taxation. The petitioner later stated they were not pressing reliefs related to the constitutionality of AAR/AAAR and the proviso to Section 5(1) of the IGST Act.

Key Issues

1. Whether the provisions of Section 96(2) of the RGST Act and Section 96 of the CGST Act, prescribing the constitution of the AAR with members from central and state tax officers, and Rule 103 of the CGST/RGST Rules, are arbitrary and unconstitutional? (Petitioner's contention: Yes, arbitrary and unconstitutional. Revenue's contention: Not recorded.) 2. Whether the provisions of Section 99 of the CGST Act and Section 99 of the RGST Act, prescribing the constitution of the AAAR with Chief Commissioner of central tax and Commissioner of state tax, are arbitrary and unconstitutional? (Petitioner's contention: Yes, arbitrary and unconstitutional. Revenue's contention: Not recorded.) 3. Whether Entry 10 of the notification dated 28.06.2017, defining 'importer' as the 'recipient' for IGST levy on reverse charge mechanism for imported goods on CIF basis, is ultra vires to Section 5(3) of the IGST Act, 2017? (Petitioner's contention: Yes, ultra vires. Revenue's contention: Not recorded.) 4. Whether the proviso to Section 5(1) of the IGST Act, 2017, leading to double taxation on imported goods by not excluding transportation services from the value, is arbitrary and violative of Articles 14 and 265 of the Constitution of India? (Petitioner's contention: Yes, arbitrary and violative. Revenue's contention: Not recorded.)