Introduction
In a significant ruling, the Gujarat High Court has directed the refund of Integrated Goods and Service Tax (IGST) paid on ocean freight. The judgment, delivered by a division bench comprising of Justices Hardik P. Modh and Priyank Lodha, addressed the issue of the validity of certain notifications and the subsequent refund claims made by M/s. ETC Agro Processing (India) Pvt. Ltd. The court's decision has far-reaching implications for businesses involved in importing goods and highlights the importance of statutory compliance and the protection of taxpayers' rights.
Background
M/s. ETC Agro Processing (India) Pvt. Ltd., a company engaged in importing and processing various pulses, had paid IGST amounting to Rs. 1,69,03,829/- on ocean freight charges between January 2018 and June 2020. The petitioner challenged the validity of Notification Nos. 8 of 2017 and 10 of 2017, which imposed IGST on ocean freight services. These notifications were earlier declared unconstitutional and ultra vires by the Gujarat High Court in previous cases. The court's decision in Mohit Minerals Pvt. Ltd. vs. Union of India was followed in subsequent cases such as Gokul Agro Resources Ltd. vs. UOI, Bharat Oman Refineries Ltd. vs. Union of India, and Comsol Energy Private Limited vs. State of Gujarat.
The Petition and Findings
The petitioner sought multiple reliefs in the present petition, including a refund of IGST paid, the quashing of certain orders, and the issuance of deficiency memos. The court noted that the impugned notifications had already been declared ultra vires in previous cases and, therefore, did not require further consideration. Referring to ADI Enterprises vs. Union of India, where a similar refund issue was addressed, the court directed the respondents to refund the amount of IGST already paid by the petitioner. The court further ordered the refund to be accompanied by statutory interest within six weeks from the date of the order.
Implications and Significance
The judgment by the Gujarat High Court holds immense significance for businesses involved in importation. The ruling reaffirms the earlier decisions declaring certain notifications ultra vires and establishes a precedent for refund claims related to IGST on ocean freight charges. The court's decision emphasizes the importance of upholding taxpayers' rights and ensuring compliance with statutory provisions. It also highlights the role of the judiciary in safeguarding the interests of businesses and providing timely relief.
Conclusion
The Gujarat High Court's judgment in the case of M/s. ETC Agro Processing (India) Pvt. Ltd. v. Union of India is a landmark ruling that reaffirms the invalidity of certain notifications and mandates the refund of IGST paid on ocean freight. By ordering the refund and emphasizing the importance of timely compliance and protection of taxpayers' rights, the court has set a crucial precedent. This decision serves as a reminder of the judiciary's role in upholding the rule of law and ensuring justice for businesses affected by unconstitutional regulations.
Case referred/cited :-
Title-Etc Agro Processing (India) Pvt. Ltd. Versus Union of India
GUJARAT HIGH COURT
