2024 (6) TMI 1266 - HC - Service Tax

Refund of service tax - constitutional validity of Rule 10 of the Place of Provision of Service Rules 2012 - ultra vires Section 66B read with Section 64 and Section 65B (52) and Section 66C (1) of the Finance Act 1994 or not - levy of service tax on the services by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India - HELD THAT - This Court by judgment and order in MOHIT MINERALS PVT LTD VERSUS UNION OF INDIA 1 OTHER 2020 (1) TMI 974 - GUJARAT HIGH COURT declared the Notification No. 8/2017 Integrated Tax (Rate) dated 28.06.2017 and the Entry No. 10 of the Notification No. 10/2017 Integrated Tax dated 28.06.2017 as ultra vires the integrated Goods and Services Tax Act 2017 on the ground that the same lacks legislative competency. The judgment delivered by this Court is also upheld by the Honourable Supreme Court. This Court in case of Sai Steel Ltd. Ors. Vs. Union of India 2019 (9) TMI 1315 - GUJARAT HIGH COURT held that The Notification Nos. 15/2017-ST and 16/2017-ST making Rule 2 (1) (d) (EEC) charge Notification No. 30/2012-ST is struck down as ultra vires Sections 64 66B 67 and 94 of the Finance Act 1994; and consequently the proceedings initiated against the writ applicants by way of show cause notice and inquiries for collecting service tax from them as importers on sea transportation service in CIF contracts are hereby quashed and set aside with all consequential reliefs and benefits. The respondents are directed to refund service tax already paid by the petitioner pursuant to the N/N. 15/2017 which is declared ultra vires as observed in case of Sai Steel Ltd. - Petition allowed.

Issues:
Challenge to the validity of Rule 10 of the Place of Provision of Service Rules, 2012 and Section 66B of the Finance Act, 1994 regarding the levy of service tax on transportation services by vessel from outside India. Validity of TRU Circular No. 206/4/2017-ST. Refund claim based on previous court judgments.

Analysis:

1. The petitions raised common issues regarding the validity of Rule 10 of the Place of Provision of Service Rules, 2012 and Section 66B of the Finance Act, 1994. The court heard the petitions analogously and delivered a common judgment.

2. The Special Civil Application No. 17804 of 2017 was treated as the lead matter for convenience in addressing the issues raised by the petitioner.

3. The petitioner sought various reliefs, including declaring Rule 10 of the Place of Provision of Service Rules, 2012 ultra vires certain sections of the Finance Act, 1994, and challenging the imposition of service tax on transportation services by vessel from outside India.

4. The petitioner was taxed for services availed for power generation under Notification 15/2007.

5. Previous judgments by the court and the Supreme Court declared certain notifications ultra vires, impacting the levy of service tax, setting a precedent for similar cases.

6. In the case of Sai Steel Ltd. & Ors. Vs. Union of India, the court struck down specific notifications as ultra vires sections of the Finance Act, 1994, leading to the quashing of proceedings against the writ applicants.

7. The court further referenced its previous order in Special Civil Application No. 2748 of 2022, reinforcing the decision to strike down notifications and provide consequential reliefs.

8. The court addressed a refund claim by the petitioner, citing relevant legal precedents regarding the refund of taxes declared unconstitutional, directing the respondents to refund the service tax paid by the petitioner within a specified timeframe.

9. The court emphasized the binding nature of its judgments on subordinate authorities, directing the respondents to refund the service tax paid by the petitioner pursuant to the invalidated notifications.

10. Ultimately, the court allowed the petitions, directing the refund of service tax paid by the petitioner and making the rule absolute, without awarding costs to any party.

← Previous Next →