M/S Shree Mahesh Oil Products (Gstin 08Abxfs1765J1Zc) vs. Union Of INDIA

Held

The Rajasthan High Court held that the petition was covered by the decisions of the Gujarat High Court in Mohit Minerals Private Limited vs. Union of India and Ors. and M/s COMSOL Energy Private Limited vs. State of Gujarat. Consequently, the Court disposed of the present petition in terms of these decisions. The Gujarat High Court in Mohit Minerals had declared Notification No. 8/2017 - Integrated Tax (Rate) and Entry No. 10 of Notification No. 10/2017 – Integrated Tax (Rate) as ultra vires the Integrated Goods and Services Tax Act, 2017, lacking legislative competency and thus unconstitutional. The Gujarat High Court in M/s COMSOL Energy Private Limited, following the Mohit Minerals judgment, had directed the respondent to sanction the refund of IGST paid by the assessee. The Rajasthan High Court's decision implies acceptance of the reasoning and operative directions of the Gujarat High Court, including the declaration of the notifications as unconstitutional and the entitlement to refund. No specific issue was left undecided.

Facts

M/s Shree Mahesh Oil Products, a registered partnership firm, filed a writ petition before the Rajasthan High Court challenging Notification No. 8/2017-Integrated Tax (Rate) and Sr. No. 10 of Notification No. 10/2017 – Integrated Tax (Rate). The petitioner sought to declare these notifications unconstitutional and ultra-vires to the Integrated Goods and Service Tax Act, 2017. Specifically, the challenge pertained to the levy of Integrated Tax on services by way of transportation of goods by vessel from outside India to India's customs station, where both the service provider and recipient are located outside India. The petitioner also sought a refund of IGST paid. The petitioner relied on decisions of the Gujarat High Court in similar matters. The respondents acknowledged that the issues were covered by the Gujarat High Court's decisions but noted that the judgment in Mohit Minerals Private Limited was under challenge before the Apex Court, though its operation was not stayed.

Key Issues

1. Whether Sr. No. 9(ii) of Notification No. 8/2017-Integrated Tax (Rate) dated 28.06.2017 is unconstitutional and ultra-vires to the Integrated Goods and Service Tax Act, 2017, to the extent it prescribes the rate for levy of Integrated Tax on services by way of transportation of goods by 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 in a non-taxable territory (outside India)? 2. Whether Sr. No. 10 of Notification No. 10/2017 – Integrated Tax (Rate) dated 28.06.2017 is unconstitutional, ultra-vires, and de-hors the provisions of Section 5(3) of the Integrated Goods and Service Tax Act, 2017 read with Section 2(93) of the Central Goods and Service Tax Act, 2017, to the extent it deems ‘Importer’ within the meaning of Section 2(26) of the Customs Act, 1962 as ‘recipient’ of service? Petitioner's arguments: The petitioner argued that the challenged notifications were unconstitutional and ultra-vires, relying on the Gujarat High Court's decisions in Mohit Minerals Private Limited vs. Union of India and Ors. and M/s COMSOL Energy Private Limited vs. State of Gujarat. The petitioner also claimed entitlement to a refund of IGST paid. Respondents' arguments: The respondents conceded that the issues were covered by the Gujarat High Court's judgments but pointed out that the Mohit Minerals judgment was under challenge before the Apex Court, although its operation was not stayed.