Case Law Details
Agarwal Coal Corporation Pvt Ltd Vs Assist. Commissioner of State Tax (Bombay High Court)
In a recent decision, the Bombay High Court has invalidated a GST demand on ocean freight, citing lack of jurisdiction. The case, initiated by Agarwal Coal Corporation Pvt Ltd against the Assistant Commissioner of Sales Tax, “C” Division, Mumbai, challenged a show cause notice issued on 26th September 2023. The notice, based on Notification No. 8/2017-Integrated Tax (Rate), dated 28th June, 2017, was contested primarily on grounds of jurisdiction.
The petitioner argued that the basis of the show cause notice, the aforementioned notification, had been struck down by the Division Bench of the Gujarat High Court in the case of Mohit Minerals Pvt. Ltd. Vs. Union of India. The Gujarat High Court ruled that no tax is leviable under the Integrated Goods and Services Tax Act, 2017, on ocean freight for services provided by a person located in a non-taxable territory. This decision was upheld by the Supreme Court in “Union of India Vs. Mohit Minerals Pvt. Ltd.”.
The Bombay High Court noted similar judgments in related cases. In Agarwal Coal Corporation Pvt. Ltd. Vs. Union of Indian & Anr., the Delhi High Court disposed of a writ petition in favor of the petitioner, quashing the impugned notification and declaring no tax leviable on ocean freight. Likewise, in M/s. Agarwal Fuel Corporation Pvt. Ltd. Vs. Union of India & Anr., the High Court of Madhya Pradesh disposed of a petition based on the same grounds.
Drawing from precedent, the Bombay HC emphasized the principles established in “M/s. Kusum Ingots & Alloys Ltd vs Union Of India And Anr.” to declare the impugned notification as ultra vires. Therefore, the show cause notice issued by the Assistant Commissioner was deemed without jurisdiction.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
