Union Of INDIA And Ors. vs. M/S Adani Wilmar Limited
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The revenue (Union of India and another) filed these appeals against the order of a learned Single Bench of the Calcutta High Court, which had allowed a writ petition filed by MCPI Private Limited (and other respondents in analogous matters). The Single Bench had followed a Gujarat High Court decision holding that no IGST was leviable on ocean freight for services provided by a person in a non-taxable territory for transporting goods from outside India to a customs station in India. The notification impugned in the writ petition was declared unconstitutional. The appeals were deferred pending a Supreme Court decision on a similar matter. The Supreme Court, in Union of India Vs. M/s. Mohit Minerals Pvt. Ltd., affirmed the Gujarat High Court's decision.
Held
The Court held that the appeals filed by the revenue were devoid of merit and dismissed them. The reasoning was based on the Supreme Court's decision in Union of India and Anr. Vs. M/s. Mohit Minerals Pvt. Ltd. and ors. (Civil Appeal No.1390 of 2022, decided on May 19, 2022). The Supreme Court, in paragraph 147 of its judgment, agreed with the High Court's view and held 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. Therefore, the order passed by the learned Single Bench, which had allowed the writ petition by following the Gujarat High Court's decision, was affirmed. The operative direction was the dismissal of the appeals.
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? Petitioner (Revenue) arguments: The judgment does not record any specific arguments made by the revenue in these appeals. However, their appeal against the Single Bench order implies a contention that the Single Bench erred in following the Gujarat High Court decision and that tax was indeed leviable. Respondent (MCPI Private Limited and others) arguments: The respondents relied on the decision of the Gujarat High Court in Special Civil Application 726 of 2018 (Mohit Minerals Pvt. Ltd. Vs. Union of India & 1 ors.), which held that no tax is leviable on ocean freight under the IGST Act for the specified services. They also relied on the subsequent Supreme Court judgment in Union of India and Anr. Vs. M/s. Mohit Minerals Pvt. Ltd. and ors. which affirmed the Gujarat High Court's view.
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.