M/S. Mahesh Vegoils Private Limited vs. Union Of INDIA

Held

The Court held that the issues involved in the present case were 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 petition was disposed of in terms of these decisions. The Gujarat High Court in Mohit Minerals had declared Notification No. 8/2017 - Integrated Tax (Rate) and Entry 10 of Notification No. 10/2017 – Integrated Tax (Rate) as ultra vires the Integrated Goods and Services Tax Act, 2017, for lacking legislative competency and being unconstitutional. The Gujarat High Court in COMSOL Energy had directed the respondent to sanction the refund of IGST paid by the assessee pursuant to Entry No. 10 of Notification No. 10/2017-IGST, which had been declared ultra vires. The Rajasthan High Court did not independently analyze the legality of the notifications but relied on the precedent set by the Gujarat High Court. No specific amount in dispute was detailed for the petitioner, but the COMSOL judgment mentioned a refund of Rs. 93.54 lakh.

Facts

M/s. Mahesh Vegoils Private Limited (Petitioner) filed a writ petition before the Rajasthan High Court at Jodhpur challenging Notification No. 8/2017-Integrated Tax (Rate) dated June 28, 2017, and Sr. No. 10 of Notification No. 10/2017 – Integrated Tax (Rate) dated June 28, 2017. The Petitioner sought to declare these notifications unconstitutional and ultra vires the Integrated Goods and Service Tax Act, 2017. Specifically, the Petitioner challenged the levy of Integrated-tax/IGST on services by way of transportation of goods by vessel from outside India to India's customs station when both the service provider and recipient are located outside India. The Petitioner also challenged the deeming of an 'Importer' as the 'recipient' of such services. The Petitioner stated that the issues were covered by decisions of the Gujarat High Court.

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 the Integrated Goods and Service Tax Act, 2017, to the extent it prescribes a rate for IGST on services by way of transportation of goods by vessel from a place outside India up to India's customs station, where both the service provider and service recipient are located 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 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 an 'Importer' within the meaning of Section 2(26) of the Customs Act, 1962, as the 'recipient' of service? Petitioner's Arguments: The Petitioner argued that the reliefs sought were covered by 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 sought refund of IGST paid based on the COMSOL Energy judgment. Respondents' Arguments: The Respondents failed to controvert that the issues were covered by the Gujarat High Court's decisions. They submitted that the judgment in Mohit Minerals Private Limited was under challenge before the Apex Court, but its operation had not been stayed.