M/S HK ENTERPRISE
v.
UNION OF INDIA & ORS.
R/Special Civil Application No. 14119 of 2024
Dated 20.11.2024
HIGH COURT: GUJARAT
The Petitioner challenged the levy of IGST on ocean freight under Notifications No. 8/2017 and 10/2017 dated 28.06.2017, asserting its unconstitutionality as affirmed in Union of India & Ors. v. Mohit Minerals Pvt. Ltd. (2022) by the Hon’ble Supreme Court. Pursuant to the said judgment, the Petitioner filed a refund claim for the period February 2019 for the IGST paid on ocean freight on 14 May 2024, on account of unutilized amount of GST Paid on Ocean Freight under Reverse Charge Mechanism on Import of Goods in India. However, the refund claim was rejected by the department on the ground that refund application filed by the Petitioner is beyond the period of 2 years from the relevant date and hence barred by the limitation.
Issue: Whether the levy of IGST on transactions of CIF value can be imposed by the Department by way of Notification which has been subsequently struck down?
Held: The Hon’ble Gujarat High Court while relying upon the judgments in Union of India & Others v. M/s. Mohit Minerals Pvt. Ltd. and M/s. Comsol Energy Private Ltd. v. State of Gujarat, held that when the Notification itself is struck down and declared unconstitutional, the department cannot insist for levy of IGST on the amount of ocean freight.Applying the principles laid down in Mafatlal Industries Ltd. v. Union of India, it was observed that the Petitioner could have filed the refund application only after the Notification were finally struck down. Therefore, such application having been filed within a reasonable time, cannot be held to be time barred. Consequently, quashed and set aside the Refund Rejection Order and directed the department to refund the amount paid along with appropriate interest for delayed refund.
To read more about this Judgement, subscribe today: https://taxo.online/product/taxo-pro/
Already a subscriber, Click to LOGIN & refer to the TAXO GST CASE LAWS
Or
Call us:- +91 99101 67919, 99996 93426
