ORAL ORDER

(PER : HONOURABLE MR. JUSTICE N.V.ANJARIA)

Heard learned advocate Mr. Anand Nainawati for the petitioner and learned advocate Mr. Utkarsh Sharma for the respondents.

2. The following prayers are made in the present petition,

“(i) to declare the levy of IGST on ocean freight paid by the petitioners in view of Sr. No. 9(ii) of Notification No. 8/2017- IT(Rate) dated 28.6.2017 read with Sr. No. 10 of Notification No. 8/2017-IT (Rate) dated 28.06.2017 read with Sr. No. 10 of Notification No. 10/2017-IT (Rate) dated 28.06.2017 as unconstitutional and ultra vires of the IGST Act, 2017;

(ii) to direct the respondents to refund the amount of Rs. 6,98,00,420/- paid by the petitioners as IGST on ocean freight of goods imported during July, 2017 to December, 2019 along with appropriate interest for delayed refund;”

2.1 The relevant entries of the impugned notifications provided thus,

“(a) Sr. No. 9(ii) of the Notification No. 8/2017-IT (Rate) dated 28.06.2017, which prescribes a rate of 5% IGST under the heading 9965 for the services provided or agreed to be provided by a person located in a non-taxable territory to a person located in a non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India.

(b) Sr. No. 10 of the Notification No. 10/2017-IT (Rate) dated 28.6.2017, which makes the importer, as defined under Section 2(26) of the Customs Act, 1962, located in the taxable territory, as the person liable to pay GST in respect of the services by way of transportation of goods by a vessel from a place outside India upto the customs station of clearance in India.”

3. The petitioner M/s. Krishak Bharati Co-Operative Limited is a national level Multi-Sate Co-Operative Society, engaged in the manufacturing of fertilizers.

3.1 During the pre-Goods and Service Tax (GST) era, the petitioner was registered with the Central Excise and Services Tax Department. In the GST regime, the petitioner has obtained registration under the Central Goods and Services Tax Act, 2017. In view of the entries in the aforementioned notifications, in capacity of importers, the petitioners paid Integrated Goods and Services tax at 5% on the reverse charge basis on the ocean freight paid for service and transport of goods by vessel from a place outside India upto the Custom Clearance Station in India by a person located in the Indian Taxable Territory to a person in the non-taxable territory. Though the petitioner was not a recipient of such service, it was due to the deeming provisions and the deeming fiction created by Entry No. 10 in the notification dated 28.6.2017, the liability of tax was fastened on the petitioner importer.

3.2 It is the case of the petitioner that during the period from June, 2017 till December, 2019, the petitioner paid IGST amounting to Rs. 6,98,00,420/- on the ocean freight charged by the foreign vessel provider to the overseas supplier for the transportation of goods upto the customs clearance destination in India. The payment of such amount of was reflected in the provisional returns filed by the petitioner.

4. While the various contentions are raised in the petition, it is stated that the aforementioned Notification Nos. 8 of 2017 and 10 of 2017 both dated 28.6.2017 read with corrigendum dated 30.6.2017 came up for consideration for their validity before this court. This court in Mohit Minerals Pvt. Ltd. vs. Union of India being Special Civil Application No. 726 of 2018 decided on 23rd January, 2020 held the said notifications to be unconstitutional and ultra vires the statute. The decision has been followed in Gokul Agro Resources Ltd. vs. UOI [2020 (35) GSTL 82 (Guj.)], Bharat Oman Refineries Ltd. vs. Union of India [2020 (41) GSTL 292 (Guj.)] and in Comsol Energy Private Limited vs. State of Gujarat [TS-1241-HS(GUJ)-2020-GST].

4.1 The above position and law emanating from the decision of this court in Mohit Minerals Pvt. Ltd. (supra) could not be disputed by learned advocates for the parties. It may also be mentioned that similar issue came up for consideration before the co-ordinate Bench in ADI Enterprises vs. Union of India being Misc. Civil Application No. 1 of 2020 in Special Civil Application No. 10479 of 2019, wherein the question was about refund of the IGST paid pursuant to the aforementioned Notifications. The court directed respondents to refund the amount of IGST already paid by the applicants pursuant to Entry No. 10 of Notification No. 10 of 2017.

4.2 In ADI Enterprises (supra), the court recorded thus in para 3, “Learned advocate appearing for the applicant would submit that the reason for filing the present application is that vires of Entry No. 10 of Notification No. 10/2017- IGST (Rate) dated 28.6.2017 issued under the Integrated Goods and Services Tax Act, 2017 was challenged by the applicant by way of captioned writ petition along with other identical writ petitions. The Division Bench of this Court vide judgment and order dated 23.1.2020 passed in the captioned writ petition along with other writ petitions allowed the writ petitions and declared Entry No. 10 of Notification No. 10/2017- IGST (Rate) dated 28.6.2017 as ultra vires the Act. He would further submit that during the pendency of the present application, Civil Appeal No. 1390 of 2022 and allied appeals preferred at the instance of the respondents also came to be dismissed by judgment and order dated 19.5.2022 passed by Hon’ble Apex Court.

4.2.1 The court thereafter directed in para 4 as under,

“In view of the above, we are of the opinion that the present application requires consideration and hence, the same is allowed in terms of prayer 6 (a). The respondents are hereby directed to grant refund of the amount of IGST already paid by the applicants pursuant to the Entry No. 10 of Notification No. 10/2017-IGST (Rate) dated 28.6.2017 along with statutory rate of interest on such refund within a period of four weeks from the date of submission of necessary documents by the applicants.”

4.2.2 The decision in Mohit Minerals Pvt. Ltd. (supra), it was stated, was taken to the Supreme Court and came to be confirmed in Civil Application No. 1390 of 2022 decided on 19.5.2022.

5. Thus, the notifications impugned in this petition have already been declared ultra vires. Therefore, the said prayer in this petition did not require any further consideration.

6. As far as the second limb of the prayer about refund of the amount of Rs. 6,98,00,420/- paid by the petitioner as IGST on ocean freight of goods imported during July, 2017 to December, 2019 is concerned, the competent authority of the respondents is directed that if such amount of IGST has been collected by the authorities, the same shall be refunded to the petitioner within six weeks from the date of receipt of this order alongwith the statutory rate of interest.

7. The petition stands allowed and disposed of in terms of the above directions.