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2023 (4) TMI 590
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....ates for R-2 & R-3. J U D G M E N T MANMEET PRITAM SINGH ARORA, J: CM APPL. 45963/2021 in W.P.(C) 14579/2021 Exemption allowed, subject to all just exceptions. Accordingly, present application is disposed of. W.P.(C) 14048/2021 W.P.(C) 14579/2021 W.P.(C) 14826/2021 & CM APPL. 28849/2022 Factual Background 1. Present writ petitions have been filed by Uber India Systems Private Limited in W.P.(C) No. 14048 of 2021 ('Petitioner 1'), Pragatisheel Auto Rickshaw Driver Union in W.P.(C) No. 14579 of 2021 ('Petitioner 2') and IBIBO Group Private Limited along with Make My Trip (India) Private Limited in W.P.(C) 14826/2021 (collectively referred to as 'Petitioner 3'). The petitions have been filed challenging the Clauses (iii) and (iv) of Notification No. 16/2021- Central Tax (Rate) and Clauses 1(i) and 2(i) of Notification No. 17/2021 - Central Tax (Rate), both dated 18.11.2021 ['impugned Notifications'], as ultra vires to the Constitution of India ('Constitution') and Section 9(5) and 11 of Central Goods and Service Tax Act, 2017 ('the Act of 2017'). 1.1. All these petitions were heard together and are being disposed of by this common judgment. 2. The f....
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....ase refer to Explanation no. (iv) ... ... ... (vi) Transport of passengers by any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient. 2.5 Provided that credit of input tax charged on goods and services used in supplying the service, other than the input tax credit of input service in the same line of business (i.e. service procured from another service provider of transporting passengers in a motor vehicle or renting of a motor vehicle), has not been taken. [Please refer to Explanation no. (iv)] Or 6 - 4. Explanation. -For the purposes of this notification, - (i) ... (ii) ... (iii) ... Wherever a rate has been prescribed in this notification subject to the condition that credit of input tax charged on goods or services used in supplying the service has not been taken, it shall mean that, - (a) credit of input tax charged on goods or services used exclusively in supplying such service has not been taken; and (b) credit of input tax charged on goods or services used partly for supp....
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....or touring purpose in a vessel between places located in India; and (e) metered cabs or auto rickshaws (including e-rickshaws) Nil Nil (Emphasis supplied) 3. The relevant portions of the impugned Notification No. 16/2021 read as under: "Notification No. 16/2021- Central Tax (Rate) New Delhi, the 18th November, 2021 G.S.R. 810(E). - In exercise of the powers conferred by sub-sections (3) and (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following amendments further to amend the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.12/2017- Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 691(E), dated the 28th June, 2017, namely:- In the said notification, in the TABLE, - ... ... ... ... ... ...; (iii) against serial n....
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....dominantly for touring purpose in a vessel between places located in India; and (e) metered cabs or auto rickshaws (including e-rickshaws) ^82[Provided that nothing contained in item (e) above shall apply to services supplied through an electronic commerce operator, and notified under sub-section (5) of Section 9 of the Central Goods and Services Tax, 2017 (12 of 2017).] (Emphasis supplied) 4. The Petitioner 1 and 2 have also challenged the amendments made to Notification No. 17/2017- Central Tax (Rate) dated 28.06.2017 vide Clauses 1(i) and 2(i) of impugned Notification No. 17/2021. 4.1. The relevant portions of Notification No. 17/2017- Central Tax (Rate) dated 28.06.2017 reads as under: "Notification No. 17/2017- Central Tax (Rate) New Delhi, the 28th June, 2017 G.S.R...(E)- In exercise of the powers conferred by sub-section (5) of Section 9 of the Central Goods and Services Tax, Act (12 of 2017), the Central Government, on the recommendations of the Council, hereby notifies that in case of the following categories of services, the tax on intra-State supplies shall be paid by the electronic commerce operator- (i) s....
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.... ECOs and freedom of choice to the consumers/riders ('consumers'), thereby violating Articles 19(1)(g) and 21 of the Constitution; c) the value of conveniences offered by ECOs, i.e., Petitioner 1 is charged separately and liable to GST; and there are no other instances of transportations supplied through ECOs being taxed differently such as that levied through the impugned Notifications, therefore, the same are liable to be struck down. 5.2. Petitioner 3 has challenged the validity of Clause (iii) of the impugned Notification No. 16/2017 on the ground that the benefits of exemption from levy of GST on passenger transportation services by a non-air-conditioned stage carriage has been denied when such services/supply are availed through ECOs, even though such supplies continue to be exempted when booking is made by consumers directly through bus operators (offline/online) or offline agents. Submissions of Petitioner 1 and 2 6. Mr. Bharat Raichandani, the learned counsel, has made detailed submissions on behalf of Petitioner 1. Mr. M. Shoeb Alam, learned counsel, argued on behalf of Petitioner 2. The summation of the arguments of the learned counsel for Petitioner 1 ....
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....s on the higher side. Apart from the financial implications it may have on Petitioner 1, the financial autonomy of the drivers will be completely jeopardized. There is a strong likelihood that due to the impact of impugned Notifications, the general public would become reluctant to avail auto rickshaws services rendered by ECO like Petitioner 1. This will lead to a loss of livelihood for the auto rickshaw drivers rendering their services through ECO maintained by Petitioner 1. The entire segment may become unviable for the ECO leading to cessation affecting the livelihoods of the 2,40,000 registered driver partners of Petitioner 1. It will also deprive them of the benefits provided by the ECO. 6.5. The impugned Notifications are ultra vires Section 11 of the Act of 2017. The livelihood of lakhs of auto drivers will be adversely affected if this segment is closed down by the ECO. Lakhs of auto drivers provide their services through ECO like Petitioner 1. Online apps provide a broader consumer base to the auto rickshaw drivers, benefits and facilities as enlisted in paragraph B.12 of W.P.(C). 14048/2022. 6.6. While there are five entries in Sl. No. 17 (from series 'a' to 'e') i....
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....d by the consumer for using the mobile application ('the Uber App') of Petitioner 1 is separately charged as 'convenience fee', which fee is already exigible to GST. The Petitioner 1 collects and pays GST on the said convenience fee charged by it, thereby eliminating the differentia pointed out by the Respondents. 6.12. A levy of GST has to be premised on the nature of the service availed by the consumer and not on the basis of the medium used by the said consumer for availing the service. Merely because an ECO such as Petitioner 1 has the ability to comply with the compliances under the statute, it cannot be a ground to tax a service supplied through ECO and continue with an exemption for the same service availed through other mediums, when the underlying nature of service continues to remain identical and similar. 6.13. The taxing event does not change if the auto rickshaw is booked through ECOs. Merely because Petitioner 1 can recover the tax component from the final consumers do not in effect mean Petitioner 1 would not suffer any legal injury. 6.14. The Petitioner 1 is an aggrieved party and has the locus standi to file the present writ petition as the business of the....
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....he consumers to book bus tickets through their websites or mobile applications. 7.3. By the impugned Notification dated 18.11.2021, Petitioner 3 is a deemed supplier of transportation of passenger services by a non-air-conditioned stage carriage and declared as not entitled to claim exemption from GST in respect of the same. 7.4. The Respondents have denied the benefit of exemption from GST to the said transportation service only when availed by the consumers through ECOs like Petitioner 3. However, such service continues to remain exempt when the booking is availed by the consumer through any other mode i.e., directly through bus operators (offline/online) or offline agents. 7.5. The discriminatory treatment can be illustrated as follows; for a bus operator (ABC) registered with the Petitioner 3, the tax implication would be as under: Basis Situation 1 Situation 2 Situation 3 Bus Operator ABC ABC ABC Nature of transport Non-air conditioned bus Non-air conditioned bus Non-air conditioned bus Mode of booking ticket Online (Using operator's website) Offline (booked through an offline agent) Online (using Petitioners' website or....
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....ne. Due to this price differentiation, consumers will not prefer booking through ECOs, thereby resulting in loss of the business of Petitioner 3. 7.10. The impugned Notifications are contrary to Sections 9 and 11 of the Act of 2017. In terms of Section 9(5) read with Section 11 of the Act of 2017, Petitioner 3 is eligible for the grant of all exemptions as are available to other suppliers of the underlying service. 7.11. However, by way of the impugned Notification, the Respondents seek to deny the benefit of exemption only to the ECOs. The impugned Notification artificially creates a distinction based on the mode of booking availed by the consumer and denies the exemption benefit available under the parent Notification to the ECOs i.e., Petitioner 3 in respect of the same specified services, which is beyond the powers conferred under Section 11 of the Act of 2017. 7.12. Section 11(1) of the Act of 2017 provides that the exemption benefit may be granted in public interest and thus, as a corollary, the same can also be denied only in public interest. The denial of the exemption benefit to the ECOs is not in public interest. 7.13. The impugned Notification seeks to deny t....
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....of Petitioner 1 and 2. It was submitted as under: 8.1. The impugned Notifications are not violative of Article 14 of the Constitution. The test for reasonable classification was laid down by the Supreme Court in the case of R.K Garg v. Union of India, (1981) 4 SCC 675 wherein it was held that in order to pass the test, two conditions must be fulfilled, namely, (a) the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others; (b) the differentia must have a rationale relation to the object sought to be achieved by the Act. 8.2. The services are classified into two groups- i) services which are taxable and ii) services which are exempted. Such classification is based on a clear intelligible differentia. In this case, the services of transport by auto rickshaws supplied through ECOs at the doorstep of the consumer falls under the taxable group; whereas those which are availed directly by the consumer by street hailing i.e., without intervention of the ECOs and through direct dealing with the auto rickshaw drivers falls under the exempt group. 8.3. This abovementioned diffe....
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....e taxes on which shall be collected and paid; by the ECOs and all the provisions of the Act of 2017 would be applicable to the ECOs as if it is the supplier liable for paying tax in relation to supply of such services. 8.8. The classification is also valid as the ECOs owing to their platform and technology provides ease of convenience and value-added services to the consumer by providing the facility of doorstep pickup, an option of payment through digital mode, security of third person's supervision on the ride, etc., and other related services available on their platform. The aforesaid value-added services are not available to the consumer when the service of street hailed auto rickshaw is availed. 8.9. The ECOs leverage their financial, organizational and informational technology resources to give a value-added experience to its consumers, which disrupts the level playing field for individual auto rickshaw drivers providing service through street hailing. The impugned Notifications bridges the gap between the unorganized auto rickshaw drivers and organized ECOs. 8.10. The argument of Petitioner 1 that the impugned Notifications treat equals unequally is incorrect in vie....
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....low the registration threshold of Rs. 20 lakhs as per Section 22 of the Act. Notification No. 23/2017- Central Tax (Rate) dated 22.08.2017 demonstrates the same. 8.13.5. Accommodation services supplied by hotels having annual turnover of Rs. 20 lakhs or less supplied through ECOs are taxable, however, the same hotel accommodation services supplied offline are not taxable. Notification No. 23/2017- Central Tax (Rate) dated 22.08.2017 and Notification No. 17/2017- Central Tax (Rate) dated 28.06.2017 annexed as Annexure A-1 to the short counter affidavit demonstrates the same. 8.13.6. Restaurant services supplied by restaurants having annual turnover of Rs. 20 lakhs or less, supplied through ECOs such as Swiggy, Zomato etc. are taxable even though the same restaurant services supplied offline are not taxable. 8.14. The Supreme Court upheld different rates of GST of 12% and 28% which existed on lottery run by States and lottery authorized by States. [Skill Lotto Solutions v. Union of India, 2020 SCC OnLine SC 990]. 8.15. The Petitioner 1 is an ECO facilitating transport of passenger services supplied through various modes and has no locus to file the present writ petition a....
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....aw drivers. 8.19. The Section 9(5) of the Act of 2017 is not the charging Section nor has the transportation of passenger services through ECOs been taxed under the same. The tax is levied upon all services under Section 9(1) unless they are exempt under Section 11(1) of the Act. The exemption on transportation by auto rickshaws and non-air-conditioned stage carriage through ECOs has been withdrawn and thus tax on the same is being levied under Section 9(1), which is the charging section of the Act of 2017. 8.20. The entities supplying goods and services through their own website does not attract the provisions of Sections 9(5) and 52 of the Act of 2017. 8.20.1. As per the definitions provided in Sections 2(44) and 2(45) of the Act of 2017, tour operator/bus operator selling tickets for their fleet of buses on their own website would come under the definition of ECOs. However, in terms of Section 52 of the Act of 2017, the Tax Collected at Source ('TCS') is required to be collected on the net value of taxable supplies made through it by other suppliers where the consideration is to be collected by the ECOs. 8.20.2. Further, the ECOs are liable to pay tax on the supplies....
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....e incapacity cannot be a reason to not impose tax on all other categories of supplies even when it is administratively possible for the supplier to collect and pay tax. 9.5. Further, the impugned Notification is applicable to all ECOs engaged in facilitating passenger transport services supplied through various modes and not just to Petitioner 3. 9.6. She states that transport of passengers by any motor vehicle designed to carry passengers, which includes non-air-conditioned stage carriage and auto rickshaw, is covered by Entry 8(ii) and (vi) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, issued under Section 9(1) of the Act of 2017. The withdrawal of exemption under the impugned Notification results in attracting levy under the Notification No. 11/2017 and therefore, the contention of the Petitioner 3 that liability has been created vide impugned Notifications under Section 9(5) of the Act of 2017, without there being any levy under Section 9(1) of the Act of 2017 is factually incorrect. 9.7. Under Central Excise law, small sector industries with turnover below 1.5 Crores were fully exempted. But it cannot be said that exempting small individual unorgani....
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....cations are not violative of Article 14 of the Constitution and fulfil the test of 'reasonable classification' [and the impugned Notifications are not ultra vires of the Act of 2017] 12. To begin with, we would like to note that in a catena of judgments, the Supreme Court^1 has laid down that a taxing statute for the reasons of functional expediency and even otherwise, can pick and choose to tax some; so long as the classification is reasonable. 12.1. The Supreme Court in R.K Garg (supra) held that the question which the Constitutional Court must address to itself is whether the classification made by the statute satisfies the test of real and substantial distinction or is it arbitrary and irrational and hence violative of the equal protection clause in Article 14 of the Constitution. The exposition of law in paragraph 6 reads as follows: "6. That takes us to the principal question arising in the writ petitions namely, whether the provisions of the Act are violative of Article 14 of the Constitution. The true scope and ambit of Article 14 has been the subject-matter of discussion in numerous decisions of this Court and the propositions applicable to cases arising und....
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....persons, objects and transactions by the legislature for the purpose of attaining specific ends. What is necessary in order to pass the test of permissible classification under Article 14 is that the classification must not be "arbitrary, artificial or evasive" but must be based on some real and substantial distinction bearing a just and reasonable relation to the object sought to be achieved by the legislature. The question to which we must therefore address ourselves is whether the classification made by the Act in the present case satisfies the aforesaid test or it is arbitrary and irrational and hence violative of the equal protection clause in Article 14." (Emphasis supplied) The statute itself recognises the ECOs as a distinct and separate class from the individual service providers 13. The provisions of the Act of 2017 itself recognises the ECOs as a class separate from the individual service providers selling their services through the e-commerce platform. In fact, notifications issued under Section 9(5) of the Act of 2017 thereunder from time to time give effect to this statutory classification. 14. To elucidate the aforesaid opinion, this Court deems it ....
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....by notification, specify the category of persons who may be exempted from obtaining registration under this Act." 14.6. Section 24(ix) describes the compulsory registration for persons, if the supply of goods or services or both are through ECO. The relevant portion reads as under: "24. Compulsory registration in certain cases "Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act,- (ix) persons who supply goods or services or both, other than supplies specified under sub-section (5) of Section 9, through such electronic commerce operator who is required to collect tax at source under Section 52;" 14.7. Section 52(1) provides for the collection of tax at source by the ECO. The same is reproduced herein below: "52. Collection of tax at source. (1) Notwithstanding anything to the contrary contained in this Act, every electronic commerce operator (hereafter in this section referred to as the "operator"), not being an agent, shall collect an amount calculated at such rate not exceeding one per cent., as may be notified by the Government....
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....t & 5(5) of IGST Act Tax on the following Intra-State/Inter-State supplies shall be paid by the ECO if such services are supplied through it: (i) With effect from 01.07.2017 N.No. 17/2017-CT(R), dated 28.06.2017 Transportation of passengers by Radio-Taxi, Motorcab, Maxicab and Motor Cycle (ii) With effect from 01.07.2017 N.No. 17/2017-CT(R), dated 28.06.2017 Accommodation in Hotels, Inns, Guest Houses, Clubs, Campsites or Other Commercial Places meant for residential or lodging purposes, except where the person supplying such service through electronic commerce operator is liable for registration under Section 22(1) of the CGST Act- i.e. where the Aggregate Turnover of the person supplying such service through ECO exceeds Rs. 20 Lakh or Rs. 10 Lakh, as the case may be. (iii) With effect from 22.08.2017 N.No. 23/2017-CT(R), dated 22.08.2017 Services by way of House-Keeping, such as plumbing, carpenting etc., except where the person supplying such service through ECO is liable for compulsory registration under Section 22(1). All the provisions of the CGST/SGST/IGST Act shall apply to such ECO as if he is the supplier liable for paying the tax....
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....7 and paid by the said ECO under Section 9(5) of the Act of 2017. The Petitioner 3 herein is therefore aware of this statutory classification and has not objected to the same as being discriminatory as between the ECO and the said hotel. The effect of the impugned Notifications in withdrawing the exemption from the ECOs and making the levy of GST, on the fare of non-air-conditioned stage carriage ticket booked through the electronic platform of Petitioner 3 is identical and not discriminatory. 16.6. Similarly, on a conjoint reading of the aforesaid sections and Notification No. 17/2017 with respect to transportation of passengers by radio taxi, motor cab, maxi cab and motor cycle shows that if the said service is provided by the individual taxi drivers of the said motor vehicles through ECOs, the said services are exigible to levy of tax by the ECO under Section 9(5) of the Act of 2017. 16.7. The services of radio taxi, motor cabs, maxi cabs and motor cycles are also available through the Uber App of Petitioner 1 and similarly, GST is being levied under Section 9(5) of the Act of 2017 on the fare of these cabs when booked through its App. Similarly, Petitioner 1 has not objec....
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.... the ECO collects from the consumers. The auto rickshaw driver who is street hailed does not have to pay this commission to the ECO. The exemption from GST available to a street hailed auto rickshaw driver therefore provides the individual auto rickshaw driver the capacity to economically compete with the services provided by the ECO and have an option to operate independently. Further, the benefits which are available to the registered driver partners of ECOs, which are represented by Petitioner 2, has been enlisted by the Petitioner 1 in paragraph B.12 of W.P.(C) 14048/2021 and ground K in W.P.(C) 14579/2021.The non-registered auto-rickshaw driver who opts out from the registration with ECOs does not have the same benefits and is for this additional reason is a distinct class vis a vis the registered driver partner (i.e., member of Petitioner 2). 16.12. There is also merit in the contention of the Respondents that the profile of the consumer who uses the online application of the ECO on a smartphone or uses the website for making reservation forms a distinct category of consumer who has the wherewithal to pay GST. 16.13. It is an admitted fact that, when a consumer books....
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....ue settlement of the State" (Section 3). Ordinarily, a tax on land or land revenue is assessed on the actual or the potential productivity of the land sought to be taxed. In other words, the tax has reference to the income actually made, or which could have been made, with due diligence, and, therefore, is levied with due regard to the incidence of the taxation. Under the Act in question we shall take a hypothetical case of a number of persons owning and possessing the same area of land. One makes nothing out of the land, because it is arid desert. The second one does not make any income, but could raise some crop after a disproportionately large investment of labour and capital. A third one, in due course of husbandry, is making the land yield just enough to pay for the incidental expenses and labour charges besides land tax or revenue. The fourth is making large profits, because the land is very fertile and capable of yielding good crops. Under the Act, it is manifest that the fourth category, in our illustration, would easily be able to bear the burden of the tax. The third one may be able to bear the tax. The first and the second one will have to pay from their own pockets, if ....
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.... the auto-rickshaw and non-air-conditioned stage carriage, in terms of the parent Notification as it stood prior to the amendment. It is stated therefore the withdrawal of exemption to the transportation service when availed through ECO has no rationale. 17.2. However, in this regard, the Respondents have explained that the exemption continues to extend to the individual service providers i.e., the individual auto rickshaw drivers or the individual bus operators since the said individuals do not have the wherewithal to meet the burden of compliances required under the Act of 2017. 17.3. This Court is of the view that the object which has to be borne in mind for determining validity of the classification, which is the subject matter of challenge in the present petition is the objective of the GST law. The constitutional scheme of GST has been looked into by the Supreme Court, in Union of India (UOI) and Others. v. VKC Footsteps India Private Limited (2022) 2 SCC 603, wherein it has been observed as under: "47. The Statement of Objects and Reasons appended to the Constitution (One-Hundred and Twenty-Second Amendment) Bill 2014 which eventually became the Constitution (....
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....les. A conventional charge should be measured by its own computation and not by facts relating to other method of computation. The circumstances that thereby the benefit of any exemption granted by the Legislature may be lost and that in some cases hardship might result are not matters which would influence courts on the construction of the statute. A taxpayer is entitled only to such benefit as is granted by the Legislature. Taxation under the Act is the rule and benefit and exemption, the exception. And in this case there is no hardship. When the textile fabrics are subjected to the processes like bleaching, dyeing and printing etc. by independent processes, whether on their own account or on job charges basis, the value for the purposes of assessment under Section 4 of the Central Excise Act will not be the processing charges alone but the intrinsic value of the processed fabrics which is the price at which such fabrics are sold for the first time in the wholesale market. That is the effect of Section 4 of the Act. The value would naturally include the value of grey fabrics supplied to the independent processors for the processing. However, excise duty, if any, paid on the grey ....
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....date as may be specified in such notification. (2) Where the Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the Council, by special order in each case, under circumstances of an exceptional nature to be stated in such order, exempt from payment of tax any goods or services or both on which taxis leviable. (3) The Government may, if it considers necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under sub-section (2), insert an explanation in such notification or order, as the case may be, by notification at any time within one year of issue of the notification under sub-section (1) or order under sub-section (2), and every such explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be. Explanation.-For the purposes of this section, where an exemption in respect of any goods or services or both from the whole or part of the tax leviable thereon has been granted absolutely, the registered person supplying such goods or services....
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....ely based on the information provided or updated by the bus operator regarding the seat availability. • The amenities, services, routes, fares, schedule, bus type, seat availability and any other details pertaining to the bus service are provided by the respective bus operator and Goibibo has no control over such information provided by the bus operator." (Emphasis supplied) 18.2. In view of the aforesaid terms and conditions, it is abundantly clear that Petitioner 1 and 3 are not acting as agents of the auto-rickshaw drivers and the bus-operators. The ECOs charge commission to the registered driver partners and the bus operators for providing digital platform to connect with the potential consumers. This is in addition to the convenience charge, the ECOs collect from the consumer. 18.3. The ECOs like Petitioner 1 and 3 assure a quality of service to the consumer with value added services such as security, digital payments, etc., which is in addition to the service provided by the individual suppliers. 18.4. For instance, in case of the cancellation of the ride, the refunds are an issue arising between the ECO and the consumer, without any reference t....
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....onstitution would be attracted and the statutory provision would suffer from the vice of arbitrariness. The submission is that this has become an incident of a class legislation: the class consists of registered persons having unutilised ITC. The class comprises of the following species (i) domestic suppliers; and (ii) exporters. The sub-species are (i) input goods; and (ii) input services. Opposing this submission, the learned ASG's submission is that this is a valid classification, denying one of the species, namely, input services the benefit of refund. 108. In Spences Hotel (P) Ltd. v. State of W.B. [Spences Hotel (P) Ltd. v. State of W.B., (1991) 2 SCC 154], a two-Judge Bench, speaking through K.N. Saikia, J. revisited the precedents of this Court governing the principles of classification in tax legislation and held : (SCC pp. 168-69, para 24) "24. ... The history of taxation is one of evolution as is the case in all human affairs. Its progress is one of constant growth and development in keeping with the advancing economic and social conditions; and the fiscal intelligence of the State has been advancing concomitantly, subjecting by new means and method....
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....utional entitlement to seek a refund. Parliament has in clause (i) of the first proviso allowed a refund of the unutilised ITC in the case of zero-rated supplies made without payment of tax. Under clause (ii) of the first proviso, Parliament has envisaged a refund of unutilised ITC, where the credit has accumulated on account of the rate of tax on inputs being higher than the rate of tax on output supplies. When there is neither a constitutional guarantee nor a statutory entitlement to refund, the submission that goods and services must necessarily be treated on a par on a matter of a refund of unutilised ITC cannot be accepted. Such an interpretation, if carried to its logical conclusion would involve unforeseen consequences, circumscribing the legislative discretion of Parliament to fashion the rate of tax, concessions and exemptions. If the judiciary were to do so, it would run the risk of encroaching upon legislative choices, and on policy decisions which are the prerogative of the executive. Many of the considerations which underlie these choices are based on complex balances drawn between political, economic and social needs and aspirations and are a result of careful analysi....
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....ailing, withholding, modifying or repealing the exemptions granted by earlier notifications. It is also correct that the Government is not bound to grant exemption to anyone to which it so desires. When the duty is payable under the provisions of the Act, grant of exemption from payment of the said duty to particular class of persons or products, etc. is entirely within the discretion of the Government. This discretion rests on various factors which are to be considered by the Government as these are policy decisions. In the present case, however, the issue is not of granting or not granting the exemption. When the exemption is granted to a particular class of persons, then the benefit thereof is to be extended to all similarly situated persons. The notification has to apply to the entire class and the Government cannot create sub-classification thereby excluding one sub-category, even when both the sub-categories are of same genus. If that is done, it would be considered as violating the equality clause enshrined in Article 14 of the Constitution. Therefore, judicial review of such notifications is permissible in order to undertake the scrutiny as to whether the notification resul....
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.... similar circumstances, both in the privileges conferred and in the liabilities imposed. Therefore, if the two persons or two sets of persons are similarly situated/placed, they have to be treated equally. At the same time, the principle of equality does not mean that every law must have universal application for all persons who are not by nature, attainment or circumstances in the same position. It would mean that the State has the power to classify persons for legitimate purposes. The legislature is competent to exercise its discretion and make classification. Thus, every classification is in some degree likely to produce some inequality but mere production of inequality is not enough. Article 14 would be treated as violated only when equal protection is denied even when the two persons belong to same class/category. Therefore, the person challenging the act of the State as violative of Article 14 has to show that there is no reasonable basis for the differentiation between the two classes created by the State. Article 14 prohibits class legislation and not reasonable classification." (Emphasis supplied) 20.2. There is no mandate in the Act of 2017 which precludes Res....
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...., the distinction drawn by the Respondents with respect to the nature of the services between entries 'a' to 'd' on one hand, and entry 'e' on the other sufficiently justifies the reasons which weighed with the Respondents for withdrawing the exemption. The taxing event which attracts the levy of GST 22. The scheme of the statute shows that Respondents are entitled to exclude a class of suppliers from the levy of tax under Sections 11, 22 and 23 of the Act of 2017 while the service or the goods itself may continue to be exigible to tax. 22.1. The issuance of the impugned Notifications by the Respondents evidences that the service of transportation by mode of auto rickshaw and non-air-conditioned stage carriages when availed through ECOs has been made exigible to tax with effect from 01.01.2022. 22.2. In this regard, the submission of learned counsel for the Respondent, Ms. Arunima Dwivedi that transport of passengers by any motor vehicle designed to carry passengers, which includes non-air-conditioned stage carriage and auto rickshaw, is covered by Entry 8 (ii) and (vi) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, issued under Section 9(1) of the Act....