Ruchi Soya Industries Limited Through Authorized Rep Anil Tulsiram Pawar vs. Union Of INDIA

Facts

Ruchi Soya Industries Limited (the Petitioner) filed a Special Civil Application before the Gujarat High Court challenging certain GST notifications. The Union of India and another respondent were arrayed as parties. The specific tax period and the exact amount in dispute are not recorded in the judgment. The procedural history indicates that the Petitioner filed a writ-application, and the Court is now passing an order based on a previous judgment.

Held

The Court held that no tax is leviable under the Integrated Goods and Services Tax Act, 2007, on the ocean freight for services provided by a person located in a non-taxable territory, by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India. The levy and collection of tax on such ocean freight under the impugned notifications were found to be impermissible in law. The Court declared Notification No. 8/2017 – Integrated Tax (Rate) dated 28th June 2017 and Entry 10 of Notification No. 10/2017 – Integrated Tax (Rate) dated 28th June 2017 as ultra vires the Integrated Goods and Services Tax Act, 2017, due to a lack of legislative competency. Consequently, both notifications were declared unconstitutional. The ratio decidendi is that the IGST Act, 2017, does not empower the levy of tax on ocean freight under the described circumstances, and the notifications exceeding this legislative power are void. The petition was disposed of, and all consequential proceedings pursuant to the quashed notifications were terminated.

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, involving transportation of goods by vessel from outside India to the customs station of clearance in India? (Question of law, turning on the IGST Act, 2007). Petitioner's Contention: The Petitioner implicitly argued that the levy and collection of tax on such ocean freight under the impugned notifications were not permissible in law, as indicated by the Court's allowance of the petition. Revenue's Contention: The judgment does not record any specific arguments made by the Revenue or the State in this particular case. However, the existence of the impugned notifications suggests the Revenue's stance was to levy tax on ocean freight.