2022 (11) TMI 1527 - HC - Service Tax

Constitutional validity of levying service tax on ocean freight in CIF contracts - Scope of Rule 10 of the Place of Provision of Services Rules, 2012 - HELD THAT - Respondents in fairness stated that subject matter of this Petition is covered by the judgment of Sal Steel Ltd. v/s Union of India 2019 (9) TMI 1315 - GUJARAT HIGH COURT and as states that revenue has preferred a SLP before the Apex Court impugning the judgment in Sal Steel (supra) where notice has been issued and that SLP has been tagged - There is no stay. Respondent states that this Petition may be allowed in view of the judgment in Sal Steel (supra) with liberty to Respondents to challenge in Apex Court. Ms. Date states that Respondents will challenge this order before the Apex Court. Respondents at liberty to take such steps as they may be advised. In view thereof, Rule 10 of the Impugned Rules is ultra vires Article 265 of the Constitution of India read with Section 66B and Section 66C of the Act to the extent it applies to the CIF contracts.

Summary

The High Court of Bombay disposed of the petition, ruling that Rule 10 of the Impugned Rules is ultra vires Article 265 of the Constitution of India. Ms. Date acknowledged the judgment in Sal Steel Ltd. v/s Union of India and stated that the petition may be allowed with liberty for Respondents to challenge in the Apex Court.