M/S. Anmol INDIA Limited vs. Union Of INDIA

Held

The Court held that no tax is leviable under the Integrated Goods and Services Tax Act, 2017, 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. Consequently, the levy and collection of tax on such ocean freight under the impugned notifications were declared not permissible in law. The Court further declared Notification No. 8/2017-Integrated Tax (Rate) dated June 28, 2017, and Entry 10 of Notification No. 10/2017-Integrated Tax (Rate) dated June 28, 2017, as ultra vires the Integrated Goods and Services Tax Act, 2017, for lacking legislative competency. Both notifications were consequently declared unconstitutional. The Court's decision was based on its prior judgment in Mohit Minerals Pvt. Ltd. vs. Union of India.

Facts

M/s. Anmol India Limited, a company engaged in importing non-coking coal, filed a writ application challenging Notifications No. 8/2017-Integrated Tax (Rate) and Entry 10 of Notification No. 10/2017-Integrated Tax (Rate), both dated June 28, 2017. The petitioner sought to declare these notifications unconstitutional, ultra vires the IGST Act, 2017, and lacking legislative competency. The core of the challenge was that no tax should be leviable under the IGST Act on "Ocean Fright" 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. The petitioner also sought to quash the levy and collection of tax on such ocean freight.

Key Issues

1. Whether Notification No. 8/2017-Integrated Tax (Rate) dated 28.06.2017 and Entry 10 of Notification No. 10/2017-Integrated Tax (Rate) dated 28.06.2017 lack legislative competency and are ultra vires the Integrated Goods and Services Tax Act, 2017, rendering them unconstitutional? Petitioner's contention: The petitioner argued that the impugned notifications were issued without the necessary legislative competence and were therefore unconstitutional. They contended that no tax is leviable under the IGST Act, 2017, on "Ocean Fright" for services supplied 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 fright under the impugned notifications were asserted to be impermissible under the law. Revenue's contention: The judgment does not record any specific arguments made by the respondents (Union of India and others).