Union Of INDIA And Ors. vs. Ivl Dhunseri Petrochem Industries Private Limited And Anr
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The Revenue (Union of India and anr.) filed these appeals against the order of a Learned Single Bench of the Calcutta High Court dated March 12, 2020. The Single Bench had allowed a writ petition filed by MCPI Private Limited (and others in analogous matters). The writ petition challenged a notification. The Single Bench had followed a decision of the Gujarat High Court in *Mohit Minerals Pvt. Ltd. Vs. Union of India*, which held that no IGST was leviable on ocean freight for services provided by a person located in a non-taxable territory for transporting goods from outside India to a customs station in India. The appeals were initially deferred pending a Supreme Court decision on a Special Leave Petition against the Gujarat High Court's order. Subsequently, the Supreme Court affirmed the Gujarat High Court's decision.
Held
The Court held that no tax is leviable under the Integrated Goods and Services Tax Act, 2007, on ocean freight for services provided by a person located in a non-taxable territory, by way of transportation of goods on a vessel from a place outside India up to the Customs station of clearance in India. This decision was based on the Supreme Court's judgment in *Union of India and Anr. Vs. M/s. Mohit Minerals Pvt. Ltd. and ors.* dated May 19, 2022. The Supreme Court affirmed the Gujarat High Court's view that a tax on the supply of a service, which has already been included by the legislation as a tax on the composite supply of goods, cannot be allowed. Consequently, the appeals filed by the Revenue were dismissed as there were no grounds to interfere with the order passed by the Learned Single Bench.
Key Issues
1. Whether tax is leviable under the Integrated Goods and Services Tax Act, 2007, on ocean freight for services provided by a person located in a non-taxable territory, by way of transportation of goods on a vessel from a place outside India up to the Customs station of clearance in India? The petitioner (respondent herein) argued that no tax is leviable on ocean freight under the IGST Act for services provided by an overseas supplier, relying on the Gujarat High Court's decision in *Mohit Minerals Pvt. Ltd. Vs. Union of India*. The Revenue (appellants) challenged this, but their arguments are not explicitly detailed in the judgment, other than their appeal against the Single Bench's order which followed the Gujarat High Court's ruling. The judgment notes that the Supreme Court has since affirmed the Gujarat High Court's decision.
Sections Cited
Integrated Goods and Services Tax Act, 2007
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Cause title — parties, addresses and appearances
JUDGMENT (Judgment of the Court was delivered by T.S. SIVAGNANAM, J.)
of India & 1 ors.) wherein it was held that no tax is leviable under the Integrated Goods and Services Tax Act, 2007, on ocean freight, for services provided by a person, located in a non- taxable territory, by way of transportation of goods on a vessel from a place outside India up to Customs station of clearance in India.
In the said decision, the notification, which was also impugned in the writ petition filed by the respondent was declared to be unconstitutional. When these appeals were heard by us on 11th November, 2021, it was brought to our notice that as against the decision of the High Court of Gujarat in Mohit Minerals Pvt. Ltd., Special Leave Petition has been filed before the Hon’ble Supreme Court and the same was pending. Noting the said submission, the hearing of the appeals was deferred awaiting the decision of the Hon’ble Supreme Court. The prayer for interim stay sought for by the appellant revenue was rejected by the said order. Subsequently, the matters were heard by us on 18th January, 2022 and noting that the appeal before the Hon’ble Supreme Court was still pending, the matters were adjourned. 3
The Learned Advocate appearing for the respondent submitted that the Hon’ble Supreme Court in Civil Appeal No.1390 of 2022 dated May 19, 2022 in Union of India and Anr. Vs. M/s. Mohit Minerals Pvt. Ltd. and ors. has affirmed the decision of the High Court of Gujarat, which was relied on to allow the writ petition filed by the respondent before us.
We have perused the judgment and in paragraph 147, the Hon’ble Supreme Court while agreeing with the view taken by the High Court held to the extent that a tax on the supply of a service, which has already been included by the legislation as a tax on the composite supply of goods, cannot be allowed.
In the light of the decision of the Hon’ble Supreme Court, no grounds have been made to interfere with the order passed by the Learned Single Bench.
Accordingly, the appeals are dismissed.
No costs. 4
Urgent photostat certified copy of this order, if applied for, be furnished to the parties expeditiously upon compliance of all legal formalities.
(T.S. SIVAGNANAM, J)
I agree,
(HIRANMAY BHATTACHARYYA, J.)
NAREN/PALLAB(AR.C) 5
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.