Case Law Details

Case Name : Mohit Mineral Pvt Ltd Vs UOI (Supreme Court)
Appeal Number : Review Petition (C) NO.2718 OF 2019 In Civil Appeal No. 10177 OF 2018
Date of Judgement/Order : 21/01/2020
Related Assessment Year :

Mohit Mineral Pvt Ltd Vs UOI (Supreme Court)

The Hon’ble Supreme Court in the above referred case held as under

Application for oral hearing is rejected. The present review petition is devoid of merits & so merits being dismissed.

The case pertained to the challenge to the Compensation Cess being levied by the Government under GST.

Brief on the earlier decision of the Hon’ble SC in case of  Union of India Vs Mohit Mineral Pvt. Ltd. (Supreme Court of India); CIVIL APPEAL NO. 10177 Of 2018; 03/10/2018

-Finance Act, 2010 with effect from 01.07.2010 levied Clean Energy Cess which was in the nature of a duty of excise on the production of coal and was being collected at the time of removal of raw coal, raw lignite and raw peat from the mine to the factory

– Clean Energy Cess was repealed by Taxation Laws (Amendment) Act, 2017

– Section 18 of the Constitution (One Hundred and First Amendment) Act, 2016 enabled the Parliament to levy a cess for five years to compensate the States for the loss of revenue on account of GST

– State compensation cess is “with respect to” goods and services tax, it is a tax

-When Constitution provision empowers the Parliament to provide for Compensation to the States for loss of revenue by law , the expression “law” used therein is of wide import which includes levy of any cess

– The Compensation to States Act, 2017 is not beyond the legislative competence of the Parliament

-The Compensation to States Act, 2017 does not violate Constitution (One Hundred and First Amendment) Act, 2016 nor is against the objective of Constitution (One Hundred and First Amendment) Act, 2016

– The Compensation to States Act is not a colourable legislation

-Principle is well settled that two taxes/imposts which are separate and distinct imposts and on two different aspects of a transaction are permissible as “in law there is no overlapping

– Levy of Compensation to States Cess is an increment to goods and services tax which is permissible in law

– Clean Energy Cess and States Compensation Cess are entirely different from each other, payment of Clean Energy Cess was for different purpose and has no bearing or connection with States Compensation Cess

– Giving credit or set off in the payment is legislative policy which had to be reflected in the legislative scheme

– Compensation to States Act, 2017 or Rules framed thereunder does not indicate giving of any credit or set off of the Clean Energy Cess already paid till 30.06.2017

– The Apex Court held that the petitioner is not entitled for any set off of payments made towards Clean Energy Cess in payment of Compensation to States.

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January 2021