Refund of IGST on ocean freight followed after the levy notifications were held unconstitutional and ultra vires.

IGST collected on ocean freight under Notifications No. 8/2017-Integrated Tax (Rate), No. 10/2017-Integrated Tax (Rate), and the corrigendum dated 30 June 2017 was refundable because those notifications had already been declared unconstitutional and ultra vires. Once the levy under the invalid notifications had no legal force, the tax collected pursuant to them could not be retained by the authorities. The refund claim was therefore maintainable, and statutory interest also followed as a consequence of the invalidity of the levy.

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Issues: Whether the IGST collected on ocean freight charges under Notification No. 8 of 2017 - Integrated Tax (Rate) dated 28.6.2017, Notification No. 10 of 2017 - Integrated Tax (Rate) dated 28.6.2017 and the corrigendum dated 30.6.2017 was liable to be refunded on the ground that the notifications had already been declared ultra vires and unconstitutional.

Analysis: The impugned notifications had earlier been held to be unconstitutional and ultra vires, and that view had been followed in subsequent decisions. Once the levy under those notifications had ceased to have legal force, any IGST collected pursuant to them could not be retained by the authorities. The claim for refund therefore followed as a necessary consequence of the prior declaration of invalidity, along with statutory interest.

Conclusion: The refund claim was maintainable and the collected IGST was directed to be refunded with statutory interest.

Final Conclusion: The petition succeeded and the tax amount collected under the invalid notifications was ordered to be returned to the petitioner with interest.

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