Gujarat HC orders Rs 1.69 crore IGST refund on ocean freight following Mohit Minerals precedent declaring notifications ultra vires

The Gujarat HC directed refund of Rs.1,69,03,829 paid as IGST on ocean freight by petitioner during January 2018 to June 2020. The court relied on precedent in Mohit Minerals Pvt. Ltd. vs. Union of India declaring Notifications 8/2017 and 10/2017 dated 28.6.2017 ultra vires. Similar relief was granted in ADI Enterprises vs. Union of India regarding IGST refund. The HC ordered authorities to refund the collected IGST amount within six weeks with statutory interest. Petition allowed.

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Issues involved:
The issues involved in the judgment include a petition seeking a writ of mandamus for refund of IGST, validity of impugned notifications, and the legality of refund claims.

Refund of IGST:
The petitioner sought a writ of mandamus for the refund of IGST already paid, citing Entry No.10 of Notification No.10/2017-IGST. The petitioner had paid IGST amounting to Rs.1,69,03,829 on ocean freight charged by a foreign vessel provider for the transportation of goods up to the customs clearance destination in India. The court directed the competent authority to refund the IGST amount collected from the petitioner within six weeks along with statutory interest.

Validity of Impugned Notifications:
The impugned notifications, specifically Notification Nos. 8/2017 and 10/2017 dated 28.6.2017, were challenged for their validity. Previous court decisions, including Mohit Minerals Pvt. Ltd. vs. Union of India, deemed these notifications unconstitutional and ultra vires the statute. The court referred to similar cases such as Gokul Agro Resources Ltd. vs. UOI and Bharat Oman Refineries Ltd. vs. Union of India, which upheld the invalidity of the notifications. The court also cited the decision in ADI Enterprises vs. Union of India, where a refund of IGST paid pursuant to Entry No.10 of Notification No. 10 of 2017 was directed.

Legality of Refund Claims:
The court acknowledged that the impugned notifications had already been declared ultra vires, rendering the prayer for consideration unnecessary. However, the court directed the competent authority to refund the IGST amount paid by the petitioner on ocean freight of imported goods. The court allowed the petition and disposed of it with directions for the refund within a specified timeframe.

This summary highlights the key issues addressed in the judgment, including the refund of IGST, the validity of impugned notifications, and the legality of refund claims, providing a comprehensive overview of the court's decision.

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