Gujarat High Court
Kandla Port Staemship Agents ... vs Union Of India on 12 June, 2024
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/17804/2017 JUDGMENT DATED: 12/06/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 17804 of 2017
With
R/SPECIAL CIVIL APPLICATION NO. 11626 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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KANDLA PORT STAEMSHIP AGENTS ASSOCIATION
Versus
UNION OF INDIA & ORS.
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Appearance:
MR ANAND NAINAWATI(5970) for the Petitioner(s) No. 1
MR SHUSHIL R SHUKLA(5603) for the Respondent(s) No. 1
MR SUDHIR M MEHTA(2058) for the Respondent(s) No. 2
PARAM V SHAH(9473) for the Respondent(s) No. 3
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
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NEUTRAL CITATION
C/SCA/17804/2017 JUDGMENT DATED: 12/06/2024
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Date : 12/06/2024
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Since the issues raised in both these
petitions are same, they were heard
analogously and are being disposed of by
this common judgment and order.
2. For the sake of convenience, the
Special Civil Application No.17804 of 2017
is treated as the lead matter.
3. By this petition under Article 226 of
the Constitution of India, the petitioner
has prayed for the following reliefs:
"(a) Issue an appropriate writ,
declaring Rule 10 of the Place of
Provision of Service Rules, 2012 to
be ultra vires Section 66B read with
Section 64 and Section 65B(52) and
Section 66C(1) of the Finance Act,
1994;
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C/SCA/17804/2017 JUDGMENT DATED: 12/06/2024
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(b) Issue an appropriate writ,
striking down Section 66B of the
Finance Act, 1994 read with Rule 10
of the Provision of Service Rules,
2012 in so far as it imposes the
levy of service tax on the services
by way of transportation of goods by
a vessel from a place outside India
up to the customs station of
clearance in India, where the
service provider and the service
recipient is located outside India;
(c) Issue a writ of mandamus or a
writ in the nature of mandamus, or
any other appropriate writ, order or
direction, under Article 226 of the
Constitution of India declaring
paras 4 & 4.1 of the TRU Circular
No.206/4/2017-ST dated 13.04.2017 to
be contrary to law;
(d) Issue a writ of mandamus or a
writ in the nature of mandamus, or
any other appropriate writ, order or
direction, under Article 226 of the
Constitution of India, restraining
to the Respondents from levying
service tax on the services by way
of transportation of goods by a
vessel from a place outside India up
to the customs station of clearance
in India;
(e) Ad-interim order in terms of
prayer (a) to (d) above;
(f) Issue any other writ, order or
direction as this Hon'ble Court may
deem just and fair and circumstances
of the case;"
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4. The facts in brief are that the
petitioner was subjected to pay tax for
the services availed by the petitioner for
generation of power as per the
Notification 15/2007.
5. This Court by judgment and order dated
23.01.2020 in case of Mohit Minierals Pvt.
Ltd. Vs. Union of India and Others
(Special Civil Application No.726 of 2018
decided on 23.01.2020) declared the
Notification No.8/2017 Integrated Tax
(Rate) dated 28.06.2017 and the Entry
No.10 of the Notification No.10/2017 -
Integrated Tax dated 28.06.2017 as ultra
vires the integrated Goods and Services
Tax Act, 2017 on the ground that the same
lacks legislative competency. The judgment
delivered by this Court is also upheld by
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the Honourable Supreme Court.
6. This Court, in case of Sai Steel Ltd.
& Ors. Vs. Union of India reported in 2019
SCC Online Guj 3706 passed the following
order:
"58.In view of the aforesaid discussion,
the writ application succeeds and is
hereby allowed. The Notification
Nos.15/2017-ST and 16/2017-ST making
Rule 2(1)(d)(EEC) charge Notification
No.30/2012-ST is struck down as ultra
vires Sections 64, 66B, 67 and 94 of the
Finance Act, 1994; and consequently the
proceedings initiated against the writ
applicants by way of show cause notice
and inquiries for collecting service tax
from them as importers on sea
transportation service in CIF contracts
are hereby quashed and set aside with
all consequential reliefs and benefits."
7. This Court passed the following order
on 25.04.2022 in Special Civil Application
No. 2748 of 2022:
"3. This Court, in case of Sai Steel
Ltd. & Ors. Vs. Union of India
reported in 2019 SCC Online Guj 3706
passed following order;
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"58.In view of the aforesaid
discussion, the writ application
succeeds and is hereby allowed.
The Notification Nos.15/2017-ST
and 16/2017-ST making Rule 2(1)(d)
(EEC) charge Notification
No.30/2012-ST is struck down as
ultra vires Sections 64, 66B, 67
and 94 of the Finance Act, 1994;
and consequently the proceedings
initiated against the writ
applicants by way of show cause
notice and inquiries for
collecting service tax from them
as importers on sea transportation
service in CIF contracts are
hereby quashed and set aside with
all consequential reliefs and
benefits."
4. The petitioner, therefore, applied
for refund on the basis of the order
passed by this Court before the
respondent - authority. However, the
respondent - authority by order dated
03.01.2022 rejected the claim of the
petitioner by observing as under
"29. As the service tax have been
declared unconstitutional and the
refund have been claimed under
section 83 of Finance Act, 1994,
the issue is whether the Central
Excise Office has power to
sanction the refund of the taxed
which have been declared as
unconstitutional. In this
connection I find that Supreme
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court in case of Mafatlal
Industries Ltd. vs. Union of India
- 1997(89)ELT247(SC) has
pronounced that such refunds are
out of the preview of Section 11B
of the Central Excise Act, 1944
and only way to get the refund of
such amount is to file Writ
Petition or Civil Suit and the
said Judgment have been relied
upon by the CESTAT in many cases.
In one such case, CESTAT Mumbai in
the case of Casa Grande Co-
Operative Housing Vs. Commissioner
of CGST (CESTAT Mumbai) in Appeal
No.ST/86347/2018 has held that
when any provision in the statute
has been held to be
unconstitutional, refund of tax
under such statute will be outside
the scope and purview of such
enactment and under such
circumstances, refund can be
claimed by way of a suit or by way
of writ petition."
5. The judgment delivered by this
Court is binding upon the sub-ordinate
authority, more particularly, when the
same is not stayed by the higher
authority inspite of the fact that the
judgment of this Court is pending
before the Apex Court for
adjudication.
6. In view of the above reasons, this
petition is allowed. The respondents
are directed to pay service tax
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already paid by the pursuant to the
Notification 15/2017, which is
declared ultra vires as observed in
case of Sai Steel Ltd. (supra). The
respondent to refund the service tax
at the earliest and not later 12 weeks
from the date of receipt of this order
along with interest as per the law.
Rule is made absolute. No order as to
costs."
8. In view of the above, these petitions
are allowed. The respondents are directed
to refund service tax already paid by the
petitioner pursuant to the Notification
15/2017, which is declared ultra vires as
observed in case of Sai Steel Ltd.
(supra). Rule is made absolute. No order
as to costs.
(BHARGAV D. KARIA, J)
(NIRAL R. MEHTA,J)
RAGHUNATH R NAIR
