Torrent Power LTD. vs. Union Of INDIA

Held

The Court held that the impugned notifications, specifically Entry No. 10 of Notification No. 10 of 2017 and its corrigendum, have already been declared ultra vires by this Court in the case of Mohit Minerals Pvt. Ltd. vs. Union of India, a decision that has been consistently followed in subsequent judgments. The Court noted that the respondents' counsel did not dispute this established legal position. Consequently, the Court found that the petitioner's claim for refund of IGST paid pursuant to these unconstitutional notifications was liable to be favourably considered. The Court directed the competent authority to verify the refund amount and grant the IGST refund along with statutory interest within eight weeks from the receipt of the order. The petition was allowed in these terms.

Facts

Torrent Power Ltd., a registered entity under the GST Act engaged in importing natural gas, filed a petition seeking a refund of Rs. 3,06,56,341/- in GST and Rs. 14,38,963/- in interest. This amount was paid by the petitioner based on Entry No. 10 of Notification No. 10 of 2017 dated 28.06.2017, which mandated reverse charge payment of IGST by importers for transportation of goods by vessel from outside India up to the Custom Clearance Station. The petitioner also sought to set aside an order dated 13.10.2021 that rejected their refund claim. The petitioner's claim is premised on this court's prior decisions declaring similar notifications unconstitutional.

Key Issues

1. Whether Entry No. 10 of Notification No. 10 of 2017-IGST (Rate) dated 28.06.2017, and its corrigendum dated 30.06.2017, are ultra vires the Integrated Goods and Services Tax Act, 2017, particularly Section 5(3) thereof, in so far as they levy IGST on the import of services by way of transportation of goods by vessel on a reverse charge basis at a specified rate (10% of CIF value). The petitioner argued that this court, in the case of Mohit Minerals Pvt. Ltd. vs. Union of India, had already declared the aforementioned notifications unconstitutional and ultra vires the statute. They relied on this precedent, which was followed in subsequent cases like Gokul Agro Resources Ltd. vs. UOI and Bharat Oman Refineries Ltd. vs. Union of India. The petitioner also pointed to a co-ordinate bench's decision in ADI Enterprises vs. Union of India, which directed refunds based on similar grounds and noted the dismissal of appeals by the Apex Court. The respondents, represented by learned advocates, did not dispute the position and law emanating from the decision in Mohit Minerals Pvt. Ltd. (supra).