IGST liability on imported inputs and ocean freight challenged; writ granted and show cause notice quashed after binding precedent affirmed.

Challenge to IGST recovery on imported inputs under the reverse charge for ocean freight was disposed of in light of binding precedent; the High Court applied the Supreme Court's affirmation of a prior High Court decision and concluded continued proceedings would be futile. The court therefore granted writ relief, quashed the show cause notice dated 31 March 2019 and relieved the taxpayer of the alleged IGST liability and associated penalties. The decision rests on finality of judicial precedent rather than fresh factual or interpretive findings about tax liability under the reverse charge mechanism for import-related freight.

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Issues:
Challenge to show cause notice issued by Commissioner of CGST regarding IGST liability.

Analysis:
The Petitioner, a company engaged in the manufacture of vegetable edible oil, challenged a show cause notice issued by the Commissioner of CGST regarding the recovery of Integrated Goods and Service Tax (IGST) amounting to Rs.4,13,47,167. The notice alleged non-discharge of IGST liability under reverse charge for importing major inputs from overseas involving payment of ocean freight. The Petitioner relied on a Gujarat High Court decision in a similar case. The Respondents argued that the issue was not settled as the matter was subjudiced in the Supreme Court. However, the Supreme Court later upheld the Gujarat High Court decision in a related case.

The High Court, considering the settled position post the Supreme Court judgment, found no purpose in continuing the matter. The Court noted that investing time and energy in the issue when it had already been conclusively decided by the Supreme Court was unnecessary. Consequently, the Court allowed the writ petition and quashed the show cause notice dated 31 March 2019, relieving the Petitioner from the IGST liability and penalties specified in the notice.

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