2022 (7) TMI 183 - HC - GST

Levy of IGST on Ocean Freight - reverse charge mechanism - petitioner had already paid the customs duties on the goods purchased - applicability of Entry No.10 of the notification dated 28.06.2017 - HELD THAT - On perusal of the impugned notice/communication dated 29.08.2019 issued by the respondent, judgement in MOHIT MINERALS PVT LTD VERSUS UNION OF INDIA 1 OTHER 2020 (1) TMI 974 - GUJARAT HIGH COURT by which Entry No. 10 of the notification dated 28.06.2017 is held utra vires the Integrated Goods and Services Tax Act,2017 which is upheld by the Hon ble Supreme Court in UNION OF INDIA ANR. VERSUS M/S MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR 2022 (5) TMI 968 - SUPREME COURT and in view of the above position, the proceedings initiated by the respondents as well as notice/communication dated 29.08.2019 are required to be quashed and set aside. Petition allowed.

Summary

Issues:
Challenge to Entry No. 10 of a notification dated 28.06.2017 under the Integrated Goods and Services Tax Act, 2017.

Analysis:
The petitioner, engaged in importing crude oil, challenged Entry No. 10 of a notification dated 28.06.2017 under the Integrated Goods and Services Tax Act, 2017. The petitioner contended that although they paid customs duties, the respondent alleged non-payment of tax on reverse charge basis on ocean freight. Entry No. 10 pertained to services supplied by a person in a non-taxable territory for transportation of goods by vessel to India's customs station. A notice was issued by the Court on 18.12.2019 regarding this matter.

The Coordinate Bench of the Court had previously ruled on a similar issue in the case of Mohit Minerals Pvt Ltd vs. Union of India, declaring Entry No. 10 as ultra vires the Integrated Goods and Service Tax Act, 2017. Consequently, the proceedings based on this entry were quashed and set aside. The petitioner cited a recent judgment by the Honorable Apex Court in Union of India vs. Mohit Minerals Pvt. Ltd., upholding the decision of the Division Bench. This supported the petitioner's argument to quash the proceedings initiated by the authority.

After hearing arguments from both sides and reviewing relevant documents, including the impugned notice and previous judgments, the Court found in favor of the petitioner. The Court held that Entry No. 10 was ultra vires the Integrated Goods and Services Tax Act, 2017, as previously determined by the Coordinate Bench and upheld by the Honorable Supreme Court. Consequently, the Court quashed and set aside the impugned notice/communication dated 29.08.2019, ruling in favor of the petitioner and making the rule absolute in this regard.