TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 590
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.... 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 factual background that has given rise to the present batch....
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....uded 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 supplying such service and partly for effecting other supplies eligible for input tax credits, is reversed as if supply of such service is an exempt supply and attracts provisions of sub-section (2) of section 17 of the Central Goods and....
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....se 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 number 15, in column (3), in the heading "Description of Services", after item (c), the following shall be inserted, namely, - "Provided that nothing contained in items (b) and (c) 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 Act, 2017 (12 of 2017)."; (iv) against serial numb....
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....es 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) services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle; xxx xxx xxx Explanation- For the purposes of this notification, .... (b) "maxicab", "motorcab" and "motor cycle" shall have the same meanings as assigned to them respectively in clauses (22), (25) and (26) of section 2 of the Motor Vehicles, 1988 (59 of 1988). 2. This notification shall come into force with effect from 1st day of July, 2017." 4.2. The relevant portions of the impugned Notification No. 17/2021 read as under: "NOTIFICATION NO. 17/2017- Central Tax (Rate) New Delhi....
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....ed 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 and 2 are as follows: 6.1. The core issue is that by way of the impugned Notifications, passenger transportation services by way of auto-rickshaws mediated by ECOs like Petitioner 1 have now been made taxable which was earlier exempted whereas autorickshaw services not mediated by platforms like Petitioner continue to be exempted. 6.2. The impugned Notifications fall foul of Article 14 of the Constitution, inasmuch as they seek to treat equally placed service providers in an unequal manner. Passenger transportation services when provided through ECOs like the Petitioner 1 and auto rickshaws which are availed through offline modes, by street hailing, without the involvement of ECOs are treated as diffe....
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....fications 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') in the parent Notification, the impugned Notification dated 18.11.2021 withdraws the exemption only for entry 'e' i.e., "metered cabs or auto rickshaws (including e-rickshaws)." Other forms of transportation, for instance, air travel (for North-East States) or through mono-rail, metro rail etc., continue to be exempt from GST irrespective of whether the same are booked through an online mode or offline mode. There are no other instances of levying tax on a service simply on the basis that they are provided through an ECO. 6.7. In addition to the transportation services, there are various other supplies of goods and services that are facilitated through ECOs, illustrated as under: 6.7.1. There is no distinction in the ra....
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...., 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 Petitioner 1 and the 2,40,000 registered driver partners will be severely impacted. 6.15. The underlying transactions of transportation in Sl. No. 17 of parent Notification before the impugned Notifications and after the impugned Notifications are illustrated as under: TRANSACTION (Before) USAGE FEE/CHARGE FARE |<-----18% GST----->| |<------------------------------0% GST----------------------->| BEFORE THE IMPUGNED NOTIFICATION A B C D E Railways (other than 1st class or A/C) Metro, Monorail, trams Inland waterways Public Transport in a vessel Metered cabs and auto rickshaw (including e-rickshaws) Railways (other than 1st class or A/C) 1 Whether GST payable on convenience fee? √ &radi....
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....s 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 mobile application) Exemption benefit Available (GST not leviable) Available (GST not leviable) Not available (GST leviable) (Emphasis supplied) 7.6. When an exemption is granted to a particular class of persons (i.e., suppliers), then the said benefit of exemption must be extended to all similar persons and the Respondents cannot create a sub-classification to exclude one sub-category. (Union of India and Others v. N.S. Rathnam and Sons, (2015) 10 SCC 681, Paras 12 &13) 7.7. A differential tax treatment is made for the very same supply only on the basis of the mode of booking. Bookings made through ECOs are taxable, while bookings made for the same service through other modes are exempt from GST. Even when the bookings are made online, there is discrimination when bookings are facilitated through ECOs and when the booking is made via the bus operator's own website. There is no rationale or intelligible differentia f....
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....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 the benefit of exemption under the parent Notification to Petitioner 3 which is otherwise available to the suppliers of such services. Therefore, the impugned Notification is ultra vires to Section 9(5) of the Act of 2017. 7.14. In case of other supplies (i.e., services of plumbers or carpenters) through an ECO, the said supplies are per se taxable. However, if such service is provided by the plumbers or carpenters directly by themselves, the same is exempted for the reason that their turnover is below the threshold specified in Section 22 of the Act of 2017. Thus, once the turnover of the individual plumbers or carpenters exceeds the threshold, they are liable to pay GST on all supplies without any distinction on the basis of mode of booking such supplies. However, in the instant case, the exemption benefit is denied to the consumer of ECOs in respect of the same supply/supplier only on the basis of mode of booking such supply. 7.15. If the liabili....
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....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 differentia has a rational nexus to the object sought to be achieved by the Act of 2017. The object of the GST law is to levy GST on every transaction of supply of goods or services as elucidated in the text of the Constitutional (One Hundred and First) Amendment Act, 2016 ('the Constitutional Amendment Act of 2016'). To tax is the rule and exemptions are to be kept to a bare minimum. One of the stated objectives of introducing GST in India is to comprehensively tax all supplies of goods and services so that the burden of tax does not fall only on a few suppliers of goods and services. 8.4. There is no equality in taxation. The Supreme Court in Union of India v. M.V. Valliappan, (1999) 6 SCC 259, para 12 held that differentiation is not always discriminatory. If there is a rational nexus on the basis of which differentiation has been made on the objects sought to have been achieved, then such differentiation is not discriminatory and does not violate the principles of Article 14 of the Constitution. 8.5....
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....rickshaw drivers and organized ECOs. 8.10. The argument of Petitioner 1 that the impugned Notifications treat equals unequally is incorrect in view of the fact that Petitioner 1 charges from the rider an additional convenience fee of Rs. 20 per ride for all auto-rickshaws booked through its platform. The average fare of an auto-rickshaw ride is between Rs. 90-100, and the convenience fees of Rs. 20 along with GST results in about 25% increase in the fare of the auto ride booked through an ECO. The Uber App also charges surge prices in fare during peak hours, which are accepted by the consumers. Therefore, there is a disparity which exists between street hailed auto rickshaws and the ones that are booked online, not only in the nature and quality of service, but also in terms of the price. 8.11. The Petitioner 1 is already paying taxes on services of passenger transport supplied through them for vehicles other than auto rickshaws such as radio taxi, motor cab, maxi cab and motor cycle. By way of the impugned Notifications, the said taxation system has been extended to all types of passenger transport including metered cabs and non-air-conditioned stage carriage, whose services are....
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....ilitating transport of passenger services supplied through various modes and has no locus to file the present writ petition as no tax has been levied on the Petitioner by way of the impugned Notifications. Even though GST is to be paid by ECOs, the same are recoverable from the consumer, who ultimately pays the GST on the said transport. Thus, Petitioner 1 being an ECO cannot be said to be aggrieved party and has no locus to file the writ petition. 8.16. The Petitioner 2, the union of auto rickshaw drivers has no locus to maintain the present petition as held by a Coordinate Bench of this Court in Sitaram Mehto & Ors. v. Govt. of NCT of Delhi, W.P.(C) No. 2878/2011 dated 17.09.2012. 8.17. The Petitioner 1, 2 and 3 have contended that the impugned Notifications adversely impact their livelihood since they are providing their services through ECOs. However, the levy of GST is pass-through in nature and would be borne by the consumer. Thus, the question of impacting the livelihood of auto-drivers providing their service otherwise and not through ECOs does not arise. 8.18. The Petitioner 1 has further argued that there is no difference between the auto rickshaws supplying their serv....
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....deration is to be collected by the ECOs. 8.20.2. Further, the ECOs are liable to pay tax on the supplies made through them by other suppliers under a notification issued under Section 9(5) of the Act of 2017. Therefore, in cases where someone is supplying their own goods or services or both through their own website, the provisions of Sections 9(5) and 52 would not be applicable. 8.21. As regards the other forms of transportation in entries at Sl. No. 17 in the parent Notification, the remaining categories from (a) to (d) are those which are provided by the sovereign with an element of public welfare and subsidized rates, thus are not at par with the services provided through ECOs in (e). The said classification is founded on an intelligible differentia having a rational relation to the object sought to be achieved by the Act of 2017. 8.22. The scope of judicial review in relation to economic legislation is extremely narrow and economic regulations require due judicial deference. [R.K Garg (supra)] 9. Ms. Arunima Dwivedi, senior standing counsel on behalf of Respondents 2 and 3, in response to the arguments of Petitioner 3 has submitted as under: 9.1. The reliance placed by Pe....
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....s were fully exempted. But it cannot be said that exempting small individual unorganized players and imposing tax on bigger organized players restricts people's choice of procuring goods and services from the larger organized players or makes it difficult for larger players to practice profession of their choice. 9.8. The contention that the impugned Notification is contrary to Sections 9 and 11 of the Act of 2017 is unfounded. The Section 11(1) of the Act of 2017 empowers the government to exempt supply of goods or services or both, either absolutely or subject to specific conditions. The impugned Notification vide which the exemption was granted to transport of passengers by stage carriage other than air-conditioned stage carriage, has been subjected to the condition that, the said exemption will not apply to services supplied through an ECO is within the power of the Respondent. 9.9. It was that the government is empowered to grant exemption in public interest, thus, as a corollary, the exemption may also be denied to any supplier only if it is in public interest. On the other hand, it was also contended that the impugned Notification is not in public interest as it restricts ....
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....he propositions applicable to cases arising under that Article have been repeated so many times during the last thirty years that they now sound platitudinous. The latest and most complete exposition of the propositions relating to the applicability of Article 14 as emerging from "the avalanche of cases which have flooded this Court" since the commencement of the Constitution is to be found in the judgment of one of us (Chandrachud, J., as he then was) in In re The Special Courts Bill, 1978 [(1979) 1 SCC 380 : AIR 1979 SC 478 : (1979) 2 SCR 476 : (1979) 2 SCJ 35]. It not only contains a lucid statement of the propositions arising under Article 14, but being a decision given by a Bench of seven Judges of this Court, it is binding upon us. That decision sets out several propositions delineating the true scope and ambit of Article 14 but not all of them are relevant for our purpose and hence we shall refer only to those which have a direct bearing on the issue before us. They clearly recognise that classification can be made for the purpose of legislation but lay down that: "1. The classification must not be arbitrary but must be rational, that is to say, it must not only be based o....
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....urt deems it appropriate to refer to the relevant provisions under the Act of 2017, which are as follows: 14.1. Section 2(44) defines an electronic commerce as under: "electronic commerce means the supply of goods or services or both, including digital products over digital or electronic network;" 14.2. Section 2(45) defines electronic commerce operator as: "electronic commerce operator means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce;" 14.3. Sections 9(1) and (5) explains the levy of tax on supply of goods or services or both through an ECO, as follows: "9. Levy and collection. (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under Section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person. xxx xxx xxx (5) The Government may....
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....n with respect to such supplies is to be collected by the operator." 15. The ECOs for the purpose of Section 9(5) and Section 52 of the Act of 2017 are entities, which are liable to collect and pay tax on the supplies made through it by other individual suppliers. Thus, Sections 9(5) and 52 of the Act of 2017 statutorily recognises the ECO as a class distinct from the individual supplier registered with the ECO. 15.1. The ECOs under Section 9(5) are liable to pay tax for the services provided by individual suppliers through it, even when the said individual supplier is otherwise exempt from taxation under Section 22(1) read with 23(2) of the Act of 2017. 15.2. Similarly, the ECOs under Section 52 are liable to collect tax at source for the taxable supplies made through it by other suppliers, even when the individual supplier itself is otherwise exempt from taxation as is evident from Section 24(ix) of the Act of 2017. 15.3. An analysis of the above referred provisions of the statute elucidates that the scheme of the Act of 2017, recognises the supply of services through the ECOs as an independent taxable event of supply distinct from the individual service providers. 15.4. Sec....
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....gistration and if a customer walks into the hotel for a direct booking, he will not be liable to pay GST on the room rent. However, if another customer makes a booking through the e-platform of an ECO, for a room in same hotel ABC International, he will be charged with GST on the room rent and the ECO will be liable to pay the GST to the treasury. 16.2. Similarly, if a customer directly avails service of a plumber, Mr. XYZ5, who is exempt under Section 23(2) of the Act of 2017 from registration, the customer will not be liable to pay GST on the services rendered by the said plumber. However, if the same plumber also is registered with an ECO and a customer avails the service of the said plumber through the ECO, the supply of service by the same plumber will be exigible to payment of GST and the ECO will be liable to pay GST to the treasury. 16.3. Section 52 makes the ECOs liable to collect the amount of tax collected at source from suppliers, who have made supplies through the ECO. To enforce this obligation of the ECO, the individual supplier who is otherwise exempt from registration under Section 23(2) is required to obtain the compulsory registration under Section 24(ix) to en....
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....ECOs seeking parity with the individual auto-rickshaw drivers and bus operators and therefore seek equality amongst unequals 16.8. It is contended by Petitioner 1 and 2 that ECO supplying the transportation of passenger service through their registered driver partners, i.e., auto-rickshaw drivers, is on parity with the individual auto-rickshaw drivers which are street hailed. Similarly, Petitioner 3 asserts that the ECO supplying the transportation of passenger service by a non-air-conditioned stage carriage is at par with the individual bus operator. 16.9. To sum it up, Petitioner 1, 2 and 3 contend that the fare charged by the Petitioner 1 and 3 from the consumer booking the ride through the ECO should continue to remain exempt from GST as is the case when the booking is made by the consumer directly with the individual auto-driver through street hailing and the individual bus operator through his booking office. In effect, the ECOs in the present matter are seeking parity of rates of fare with the individual auto-rickshaw driver and the individual bus operator. In the opinion of this Court, the ECO by seeking parity with the individual service provider, is seeking equality am....
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....ultiple payment options available to the consumer which includes digital payments in addition to cash, (iv) the supervisory role which the ECO plays to monitor the transaction etc. Therefore, whereas the quality of the physical ride in the auto rickshaw may remain the same even if it is street hailed, the experience of the doorstep convenience and the assurance Petitioner 1 is assuming the safety for the ride makes the experience different for the consumer. Therefore, the consumer who uses Uber App to an auto rickshaw ride and the consumer who uses a street hailed auto rickshaw fall under a different category. 16.14. The Petitioner 1 and 3 admitted that the implementation of the notification has resulted in loss of revenue in this segment to the ECO. In the opinion of this Court, therefore, it is apparent that the withdrawal of the exemption from the ECOs has led to a pricing war, wherein the ECOs find themselves at a disadvantage. In essence, the ECOs have competing commercial interest with the bus operator or the auto rickshaw drivers and by way of these petitions are seeking parity with the said individuals. 16.15. This Court is thus unable to accept the said contention of Pet....
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....the very provisions of the taxing section. It is also clear that there is no attempt at classification in the provisions of the Act. Hence, no more need be said as to what could have been the basis for a valid classification. It is one of those cases where the lack of classification creates inequality. It is, therefore, clearly hit by the prohibition to deny equality before the law contained in Article 14 of the Constitution. (Emphasis supplied) 16.16. Therefore, this Court is of the opinion that the classification of the ECOs like Petitioner 1 and 3, as a class of service providers, which are separate and distinct from the individual supplier is, therefore, statutorily classified and recognised in the provisions of the Act of 2017 and more specifically in Sections 9(5) and 52 of the Act of 2017. 16.17. In view of the statutory recognition in the Act of 2017 that the ECOs are a distinct category, the submission of the Petitioner 1 and 3 that an ECO is necessary entitled to all the exemptions, which are available to an individual service provider is incorrect. Hence, this Court is of the view that the impugned Notifications are not ultra vires to Sections 9(5) of the Act of 2017....
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....removing the cascading effect of taxes; and (2) providing for a common national market for goods and services. An extract from the Statement of Objects and Reasons is set out below: The Constitution is proposed to be amended to introduce the goods and services tax for conferring concurring taxing powers on the Union as well as the States including Union territory with Legislature to make laws for levying goods and services tax on every transaction of supply of goods or services or both. The goods and services tax shall replace a number of indirect taxes being levied by the Union and the State Governments and is intended to remove cascading effect of taxes and provide for a common national market for goods and services. The proposed Central and State goods and services tax will be levied on all transactions involving supply of goods and services, except those which are kept out of the purview of the goods and services tax." (Emphasis supplied) 17.4. To achieve the aforesaid objective of the law, it is evident that to tax is the rule and exemptions are to be kept to the bare minimum. In this regard, it would be instructive to refer to the exposition of law under erstwhile Centra....
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.... the aforesaid stated objective of the GST law that every transaction must be taxed. Therefore, the impugned Notifications, which seek to withdraw the exemption and tax the consumers who elect to avail a ride in the auto rickshaw or a non-air-conditioned stage carriage through ECOs, is in conformity with the stated objective of the Act of 2017. 17.6. Section 9(5) of the Act of 2017 creates a statutory fiction which permits the Respondents to consider the ECOs as the deemed suppliers of the services availed by the consumer through the online platform facilitated by the ECOs. And thereby, this results in liability of tax compliance for the services availed through the ECO. The intent of Section 9(5) is to plug leaks in collection of GST and therefore, the Respondent is empowered under the said section to consolidate the liability to collect and pay tax for the services supplied through ECO. This is also evident from the provision of Section 52 of the Act of 2017. 17.7. The object of the parent Notification, as it stands today post amendment, with respect to entries pertaining to auto rickshaws and non-air-conditioned stage carriage is now limited to exempt the individual service pr....
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.... The impugned Notifications does not result in an artificial discrimination and classification based on the 'mode of booking' 18. The contention of the Petitioner 1 and 3 that the ECOs are merely facilitating a 'mode of booking' and are therefore, entitled to the exemption as available to the individual suppliers providing the service is a half-truth. 18.1. The relationship between the ECOs, the consumer and the vendor are on a principal-to-principal basis. In this regard, this Court deems it appropriate to refer to the terms and conditions (as on 01.03.2023) as made available from the website of Petitioner 1 and 3, which reads as under: Petitioner 1 "2. The Services The Services constitute a technology platform that enables users of Uber's mobile applications or websites provided as part of the Services (each, an "Application) to arrange and schedule transportation and/or logistics services with independent third party providers of such services, including independent third party transportation providers and independent third party logistics providers under agreement with Uber or certain of Uber's affiliates ("Third Party Providers"). Unless otherwise agreed by Uber in a s....
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....1 and 3 that ECOs are merely a platform which facilitates a mode of booking, is incorrect as the ECOs assume responsibility for the discharge of services assured by the ECOs to the consumer, which are rendered by the ECO. The ECOs are providing bundle of services and partake a charge/commission from both the consumers and the individual supplier. Therefore, for all purposes, the ECOs are an independent supplier of service to the consumer. And, the service provided by the individual supplier is only one facet of the bundle of services assured by the ECOs to the consumer booking through it. Hence, the impugned Notifications do not result in discrimination on the basis of the mode of booking. The Petitioner 1, 2 and 3 cannot claim exemption from taxation as a vested right. The Respondents are well within their power to withdraw the exemption granted previously under the unamended parent Notification 19. It is trite law that there can be no vested right in claiming exemption from payment of tax. If the Respondents are of the opinion that the exemption which was earlier extended by the unamended parent Notification to the ECOs in 2017 should be withdrawn, with the passage of time in 2....
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.... of course within constitutional limitations." 109. The Court held that the principle of equality does not preclude the classification of property, trade, profession and events for taxation - subjecting one kind to one rate of taxation and another to a different rate. The State may exempt certain classes of property from any taxation at all and impose different specific taxes upon different species which it seeks to regulate. The Court held : (Spences Hotel case [Spences Hotel (P) Ltd. v. State of W.B., (1991) 2 SCC 154] , SCC p. 171, para 27) "27. 'Perfect equality in taxation has been said time and again, to be impossible and unattainable. Approximation to it is all that can be had. Under any system of taxation, however, wisely and carefully framed, a disproportionate share of the public burdens would be thrown on certain kinds of property, because they are visible and tangible, while others are of a nature to elude vigilance. It is only where statutes are passed which impose taxes on false and unjust principle, or operate to produce gross inequality, so that they cannot be deemed in any just sense proportional in their effect on those who are to bear the public charges that ....
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....CC 673, wherein it was held as follows: "25. An exemption is by definition a freedom from an obligation which the exemptee is otherwise liable to discharge. It is a privilege granting an advantage not available to others. An exemption granted under a statutory provision in a fiscal statute has been held to be a concession granted by the State Government so that the beneficiaries of such concession are not required to pay the tax or duty they are otherwise liable to pay under such statute. The recipient of a concession has no legally enforceable right against the Government to grant of a concession except to enjoy the benefits of the concession during the period of its grant. This right to enjoy is a defeasible one in the sense that it may be taken away in exercise of the very power under which the exemption was granted. (See Shri Bakul Oil Industries v. State of Gujarat [(1987) 1 SCC 31 : 1987 SCC (Tax) 74], Kasinka Trading v. Union of India [(1995) 1 SCC 274] and Shrijee Sales Corpn. v. Union of India [(1997) 3 SCC 398])." (Emphasis supplied) 19.3. We are therefore, unable to accept the challenge of the Petitioner 1, 2 and 3 to the impugned Notifications on the ground that th....
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....r Article 14 of the Constitution of India. 11. In Chhotabhai Jethabhai Patel & Co. v. Union of India [AIR 1962 SC 1006], it was stated: (AIR p. 1021, para 37) '37. But it does not follow that every other article of Part III is inapplicable to tax laws. Leaving aside Article 31(2) that the provisions of a tax law within legislative competence could be impugned as offending Article 14 is exemplified by such decisions of this Court as Suraj Mall Mohta & Co. v. A.V. Visvanatha Sastri [AIR 1954 SC 545 : (1955) 1 SCR 448] and Shree Meenakshi Mills Ltd. v. A.V. Visvanatha Sastri [AIR 1955 SC 13 : (1955) 1 SCR 787]. In K.T. Moopil Nair v. State of Kerala [AIR 1961 SC 552] the Kerala Land Tax Act was struck down as unconstitutional as violating the freedom guaranteed by Article 14. It also goes without saying that if the imposition of the tax was discriminatory as contrary to Article 15, the levy would be invalid.' 12. A taxing statute, however, enjoys a greater latitude. An inference in regard to contravention of Article 14 would, however, ordinarily be drawn if it seeks to impose on the same class of persons or occupations similarly situated or an instance of taxation which leads to....
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....ances of levying tax on other transportations facilitated through ECOs 21. The contention of the Petitioner 1 and 3 that there are no instances of levying tax on a service simply on the basis that they are provided through an ECO is factually incorrect. In this regard, this Court has already taken note hereinbefore of Notification No. 17/2017, Notification No. 23/2017 and newly inserted Clause (iv) in Notification No. 17/2017 vide impugned Notification No.17/2021 [there is no challenge to this clause (iv) in the present proceedings]. 21.1. The Petitioner 1 and 2 contended that among the five entries in Sl. No. 17 (from series 'a' to 'e') in parent Notification, the impugned Notifications selectively withdraw the exemption for services facilitated by ECO only for entry 'e' i.e., auto rickshaws and not for the other entries. It has been demonstrated that for bookings made through ECOs, for the other specified forms of transport such as trains, included in entry 'a', no GST is levied on the fare. It is stated that the withdrawal of exemption only with respect to auto rickshaws is discriminatory. 21.2. In this regard, this Court is satisfied that the Respondents have sufficiently ex....
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.... service when provided through the ECO has been made exigible to tax under Section 9(1) read with Section 9(5) of the Act as a taxable event under Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 read with the impugned Notifications. The locus of the Petitioner 23. The Respondents have raised an objection that Petitioner 2 which is a union has no locus to maintain the present petition. It is stated that since the withdrawal of the exemption effects the consumer using the auto rickshaw and since no consumer has objected to the said levy, the present petition is not maintainable at the behest of the Union. In this regard, reliance has been placed on a judgment of a coordinate Bench of this Court in Sitaram Mehto (supra). 23.1. The Respondents have also, on similar grounds, raised an objection that Petitioner 1 and 3 ECOs are not entitled to maintain the present petition since the levy has been made on the consumer and is payable by the rider. 23.2. In view of the fact that the petitions have been finally heard and the issues have been decided on the merits, the said objection has become academic and therefore, this issue is not being opined upon by this Court. Conclu....