2023 (10) TMI 634 - HC - GST

Constitutional Validity of N/N. 8/2017-IT(Rate) dated, 28.07.2017 and the Entry of the N/N. 10 of 2017-IT(Rate), dated 28.06.2017 - levy of GST on Ocean Freight Services - HELD THAT - 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 28.06.2017 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. 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. This Writ Petition is allowed.

Summary

Issues involved:
The issues involved in this case include a writ petition filed for Certiorarified Mandamus to quash an impugned order and rectification order, and to direct the respondents to sanction and grant a refund of Rs. 45,93,793/- along with appropriate interest for the month of February 2018.

Summary:

Issue 1: Legal Validity of GST on Ocean Freight Services
The writ petition challenged the levy of GST on Ocean Freight Services, citing a judgment by the Hon'ble Gujarat High Court in a similar case and subsequent dismissal of a Civil Appeal by the Hon'ble Supreme Court. The Supreme Court held that the levy of GST on Ocean Freight Services was ultra vires section 8 of the CGST Act and section 5(3) of the IGST Act, making no GST leviable on such services.

Issue 2: Rectification Application under CGST Act
Following the judgment, the petitioner filed a rectification application under section 161 of the CGST Act to rectify an Order-in-Original. However, the respondents rejected the application, stating that the petitioner could seek remedy before the Goods and Service Tax Appellate Tribunal, which was not constituted at the time. This led to the filing of the present writ petition seeking relief.

Judgment:
The court acknowledged the settled issue regarding the levy of GST on Ocean Freight Services and the invalidity of specific notifications. As a result, the respondents were directed to refund the amount collected, totaling Rs. 45,93,793/-. The court left the decision on the interest portion open for adjudication by the parties. The writ petition was allowed with no order as to costs, and connected Miscellaneous Petitions were closed.