M/S Mosaic INDIA Private Limited vs. Union Of INDIA
Original PDF →Facts
M/s Mosaic India Private Limited, a company engaged in import and trading of fertilizers and animal feed supplements, filed a writ application challenging notifications that levied Integrated Goods and Services Tax (IGST) on services of transportation of goods by vessel from outside India to the Indian customs station. The petitioner argued that the service provider and recipient were located outside India, and the notifications were unconstitutional and ultra vires the IGST Act. Specifically, they challenged Sr.No.9(ii) of Notification No.8/2017-ITR and Sr.No.10 of Notification No.10/2017-ITR, which deemed the importer liable to pay GST. The Gujarat High Court was considering these challenges.
Held
The Court held that no tax is leviable under the Integrated Goods and Services Tax Act, 2017, on ocean freight for services provided by a person located in a non-taxable territory, by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India. The levy and collection of tax on such ocean freight under the impugned notifications were not permissible in law. Consequently, Notification No.8/2017 – Integrated Tax (Rate) dated 28th June 2017 and Entry 10 of Notification No.10/2017 – Integrated Tax (Rate) dated 28th June 2017 were declared ultra vires the Integrated Goods and Services Tax Act, 2017, for lack of legislative competency, and thus unconstitutional. The Court relied on its previous judgment in Mohit Minerals Pvt Ltd. V/s Union of India.
Key Issues
1. Whether Sr.No.9(ii) of Notification No.8/2017-ITR is unconstitutional and ultra vires the IGST Act, as it prescribes a rate for IGST on services by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India, where both the service provider and service recipient are located outside India? 2. Whether Sr.No.10 of Notification No.10/2017-ITR is unconstitutional and ultra vires Section 5(3) of the IGST Act read with Section 2(93) of the CGST Act, as it deems the importer liable to pay GST in respect of such transportation services? The Petitioner argued that the impugned notifications were unconstitutional and ultra vires the IGST Act. The Revenue's arguments are not recorded in the judgment.
Sections Cited
Section 5(3), Section 2(93), Section 2(26)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA)
By this Writ Application under Article 226 of the Constitution of India, the writ applicant-a Company, incorporated under the provisions of the Companies Act, 1956 and engaged in the import and trading of various fertilizers and animal feed supplement, has prayed for the following reliefs: “(a) Issue
an appropriate
writ, declaring Sr.No.9(ii) of the Notification No.8/2017-ITR dated 28.6.2017 to be unconstitutional and ultra vires the provisions of the IGST Act as it prescribed rate for the levy of IGST on the services by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India, where the service provider and the service recipient is located outside India; C/SCA/22085/2019 ORDER (b) Issue
an appropriate
writ, striking
down
Sr.No.10
of the Notification
no.10/2017-ITR
dated 28.6.2017 to be unconstitutional and ultra vires Section 5(3) of the IGST Act read with Section 2(93) of the CGST Act as it deems the importer, as defined under Section 2(93) of the CGST Act as it deems the importer, as defined under Section 2(26) of the Customs Act, 1962 located in the taxable territory, as the person liable to pay GST in respect of the services by way of transportation of goods by a vessel from a place outside India to the customs station of clearance in India; (c) Issue a writ of mandamus or a writ in the nature of mandamus, or any other appropriate writ, order or direction, under Article 226 of the Constitution of India, restraining to the Respondents from levying IGST on the services by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India; (d) Issue any other writ, order or direction as this Hon’ble Court may deem just and fair and circumstances of the case; (e) For such further and other reliefs as the nature and circumstances of the case may require.”
We need not adjudicate the Writ Application any further, as this Court, on 23rd January, 2020, in the case of Mohit Minerals Pvt Ltd. V/s Union of India & 1 other(s) in [Special Civil Application No.726 of 2018 and allied matters], has struck down the impugned notification. Paragraph Nos.254 and 255 of the said judgment, delivered by this Court, read thus: “254. In view of the aforesaid discussion, we have reached to the conclusion that no tax is leviable under the Integrated Goods and C/SCA/22085/2019 ORDER Services Tax Act, 2007, on the ocean freight for the services provided by a person located in a non-taxable territory by way of transportation of goods by a vessel from a place outside India upto the customs station of clearance in India and the levy and collection of tax of such ocean freight
under the impugned Notifications is not permissible in law.
In the result, this writ- application along with all other connected
writ-applications
is allowed. The impugned Notification No.8/2017 – Integrated Tax (Rate) dated 28th June 2017 and the Entry 10 of the Notification No.10/2017 – Integrated Tax (Rate) dated 28th June 2017 are declared as ultra vires the Integrated Goods and Services Tax Act, 2017, as they lack legislative competency. Both the Notifications are hereby
declared
to be unconstitutional. Civil Application, if any, stands disposed of.”
In view of the aforesaid, this Writ Application stands disposed of. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) PALAK
Reproduced from the public record of the Gujarat High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.