Viterra India Pvt Ltd Vs Union of India
Date: August 14, 2024
Subject Matter
Ocean Freight Service is not subject to GST
Summary
This case law involves a Writ Petition where the petitioner seeks to quash an order in appeal dated December 3, 2021, and a rectification order dated June 28, 2022, while also requesting the refund of ₹13,147 along with interest for July 2019. The crux of the matter pertains to a legal principle established by the Hon'ble Supreme Court, which confirms the earlier verdict of the Gujarat High Court regarding the levy of GST on Ocean Freight Services. The Supreme Court ruled that the specific notifications (8/2017-IT(Rate) dated 28.07.2017 and 10/2017-IT(Rate) dated 06.2017) imposing such a levy were struck down as ultra vires to the rights under the GST Act, meaning that GST was not applicable to these services. Following this judgment, the petitioner filed for rectification of a previous order under Section 161 of the CGST Act, which was rejected by the respondents, who indicated that there were available remedies before the GST Appellate Tribunal. However, since the Tribunal had not been constituted, the petitioner turned to the court. The court concluded that the issue concerning the levy of GST on Ocean Freight Services has already been settled by the Supreme Court, determining that the respondents are not authorized to collect GST for these services and must provide a refund of ₹45,93,793 to the petitioner. As for any interest due, the court allowed for adjudication on that matter at a later stage. The writ petition was consequently disposed of without costs, and related miscellaneous petitions were closed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This Writ Petition is filed to quash the order in appeal dated 03.12.202 1 and rectification order dated 28.06.2022 passed by the respondent Nos.2 and 3 respectively and direct the respondents to forthwith sanction and grant the refund of Rs. 13,147/- along with appropriate interest for the month of July 2019.
2. It is submitted by the learned counsel for the petitioner as well as the learned counsel for the respondents that the issue stands covered by the judgment of the Hon’ble Supreme Court in 2022(61)GSTL 257 (SC) confirming the judgment of Gujarat High Court, wherein it was held that the levy of GST on Ocean Freight Services vide notification 8/2017-IT(Rate), dated 28.07.2017 and the Entry of the Notification No.10 of 2017-IT(Rate), dated 06.2017 was struck down. The relevant portion of the judgment is extracted hereunder:
“3. The issue raised in this Writ petition was already allowed in favour of the assessee by the Hon’ble Gujarat High Court in the case of Mohit Minerals V. Union of India, reported in [2020 (33) GSTL 321 (Guj.) whereby the Notification 8/2017- IT(Rate) dated, 28.07.2017 and the Entry of the Notification No.10 of 2017-IT(Rate), dated 06.2017 was struck down. Subsequently the Department preferred SLP before the Hon ‘ble Supreme Court, whereby the Civil Appeal was dismissed vide order dated 19.05.2022 reported in 2022 (61) GSTL 257 (SC) confirming the judgment of Gujarat High Court holding that the levy of GST on Ocean Freight Services vide the notification stated supra is ultra vires section 8 of the CGST Act as well as section 5(3) of the IGST Act and accordingly no GST is leviable on such service.
4. Based on the aforesaid judgment, the petitioner had filed rectification application dated 30.05.2022 under section 161 of CGST to rectify the Order-in-Original dated 03.12.2012, but the respondents rejected the application vide order dated 28.06.2022, stating that the petitioner is having remedy before the Goods and Service Tax Appellate Tribunal. However the Tribunal has not been constituted and thus the Tribunal is not in existence. Hence the petitioner had filed the present writ petition.
5. It is an admitted fact that the issue of levy of GST on Ocean Freight Services is settled by the Hon ’ble Supreme Court and the Notification 8/2017- IT(Rate) dated, 28.07.2017 and the Entry of the Notification No.10 of 2017-IT(Rate), dated 06.2017 is struck down as ultra vires. In such circumstances the respondents are not empowered to collect GST for the Ocean Freight Services and consequently the respondents are bound to refund the amount collected.
6. Therefore, the respondents are liable to refund an amount of Rs. 45,93,793/- and the respondents are directed to refund the same. As far as the interest portion is concerned, this Court is leaving open to the parties to adjudicate the same.”
3. In view thereof, the Writ Petition is disposed of on the above terms. No costs. Consequently, connected miscellaneous petitions are closed.