Eastman International vs. Union Of INDIA And Another
Facts
The petitioners, Eastman International, Garg Acrylics, and Madhav Alloys Ltd., filed writ petitions challenging certain provisions of the Service Tax Rules, 1994. Specifically, they challenged item (EEC) of Rule 2(1)(d)(i) inserted by Notification No. 16/2017-ST dated 13.04.2017 and Explanation 'V' of Notification No. 30/2012-Service Tax dated 20th June, 2012, inserted by Notification No. 15/2017-ST dated 13.04.2017. The petitioners argued these provisions were ultra vires the Constitution of India and Chapter V of the Finance Act, 1994. They relied on a Gujarat High Court judgment in 'M/s Mohit Minerals Pvt. Ltd. vs. Union of India and another' which struck down similar provisions. The respondent, Union of India, stated that a Special Leave Petition (SLP) was filed against the Bombay High Court's decision in 'Skoda Auto Vokswagen India Pvt. Ltd. Vs. Union of India and ors.', which was tagged with other pending SLPs.
Held
The Court allowed the writ petitions, stating that the case of the petitioners was squarely covered by the judgment in Skoda Auto Vokswagen India Pvt. Ltd.’s case. While the specific reasoning of the Skoda Auto Vokswagen case is not detailed in this judgment, it is implied that the High Court found the challenged provisions to be ultra vires, similar to the Gujarat High Court's ruling in M/s Mohit Minerals Pvt. Ltd. The ratio decidendi is that if similar provisions have been struck down by other High Courts and the Supreme Court has not granted a stay on such decisions, then subsequent petitions challenging identical provisions should be allowed. The operative direction was to allow the writ petitions in the same terms as the Skoda Auto Vokswagen India Pvt. Ltd. case. No issue was expressly left undecided.
Key Issues
1. Whether item (EEC) of Rule 2(1)(d)(i) of the Service Tax Rules, 1994, inserted by Notification No. 16/2017-ST dated 13.04.2017, and Explanation 'V' of Notification No. 30/2012-Service Tax dated 20th June, 2012, inserted by Notification No. 15/2017-ST dated 13.04.2017, are ultra vires the Constitution of India and Chapter V of the Finance Act, 1994? Petitioner's Arguments: The petitioners contended that the challenged provisions were ultra vires the Constitution of India and Chapter V of the Finance Act, 1994. They relied on the Gujarat High Court's decision in 'M/s Mohit Minerals Pvt. Ltd. vs. Union of India and another' and the Bombay High Court's decision in 'Skoda Auto Vokswagen India Pvt. Ltd. Vs. Union of India and ors.'. Respondent's Arguments: The respondent (Union of India) did not present specific arguments against the petitioners' claims but indicated that an SLP had been filed against the Bombay High Court's judgment and was pending.
Sections Cited
Rule 2(1)(d)(i), Notification No.16/2017-ST, Notification No.30/2012-Service Tax, Notification No.15/2017-ST
AI-generated summary — verify with the full judgment below
CWP-25578-2019 and connected matters
2023:PHHC:113626-DB
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
CWP-25778-2019
CWP-34183-2019
CWP-374-2020 Date of decision:- 02.08.2023
CORAM: HON'BLE MS. JUSTICE RITU BAHRI HON'BLE MRS. JUSTICE MANISHA BATRA
Present: Mr. Deepak Gupta, Advocate for the petitioner (s)
Mr. Tejinder K. Joshi, Sr. Standing counsel for the respondent (s). *** Ritu Bahri, J.
This order shall dispose of the above three petitions as learned counsel for the parties are ad idem that the issue involved in the above writ petitions are identical. However, the facts are being taken from CWP No. 25778-2019. Gaurav Arora 2023.09.22 14:47 I attest to the accuracy and authenticity of this order/document P&H HC, Chandigarh
CWP-255
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