Ocean Freight Services GST Levy Struck Down: Statutory Provisions Violated, Refund Ordered for Improper Tax Collection

HC allowed writ petition challenging GST on ocean freight services. Court directed respondents to refund Rs. 45,93,793/- collected as GST, finding the levy ultra vires relevant statutory provisions. Interest component was left open for further adjudication. Petition was allowed without costs, with connected miscellaneous petitions closed.

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Issues involved:
The issues involved in this case include a writ petition filed for Certiorarified Mandamus to quash an impugned order and rectification order, and to direct the respondents to sanction and grant a refund of Rs. 45,93,793/- along with appropriate interest for the month of February 2018.

Summary:

Issue 1: Legal Validity of GST on Ocean Freight Services
The writ petition challenged the levy of GST on Ocean Freight Services, citing a judgment by the Hon'ble Gujarat High Court in a similar case and subsequent dismissal of a Civil Appeal by the Hon'ble Supreme Court. The Supreme Court held that the levy of GST on Ocean Freight Services was ultra vires section 8 of the CGST Act and section 5(3) of the IGST Act, making no GST leviable on such services.

Issue 2: Rectification Application under CGST Act
Following the judgment, the petitioner filed a rectification application under section 161 of the CGST Act to rectify an Order-in-Original. However, the respondents rejected the application, stating that the petitioner could seek remedy before the Goods and Service Tax Appellate Tribunal, which was not constituted at the time. This led to the filing of the present writ petition seeking relief.

Judgment:
The court acknowledged the settled issue regarding the levy of GST on Ocean Freight Services and the invalidity of specific notifications. As a result, the respondents were directed to refund the amount collected, totaling Rs. 45,93,793/-. The court left the decision on the interest portion open for adjudication by the parties. The writ petition was allowed with no order as to costs, and connected Miscellaneous Petitions were closed.

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