TMI Blog2024 (3) TMI 1265X X X X Extracts X X X X X X X X Extracts X X X X ..... ice dated 31 March 2019 calling upon the petitioner to show cause as to why Integrated Goods and Service Tax may not be recovered under Section 74(1) of the Central Goods and Services Act, 2017 (for short CGST Act ) alongwith interest and penalty on the ocean trade service. This Court following the decision of the High Court of Gujarat in Mohit Minerals (supra) as also the decision of the Supreme Court in Union of India Vs. Mohit Minerals Pvt. Ltd. [ 2020 (1) TMI 974 - GUJARAT HIGH COURT] allowed the petitioner s proceedings, setting aside the show cause notice. The present petition also needs to be allowed considering the decision in the case of Mohit Minerals. Also, a submission being made on behalf of the respondent is noted namely that the decision in Mohit Minerals needs to be applied only in respect of the cases which involve the contracts on CIF basis and not FOB contracts. It is submitted that in the present case the show cause notice has been issued referring to Notification No. 8/2017-Integrated Tax (Rate) dated 28-6-2017 as the contract was a FOB contract. It is found that such argument is totally untenable inasmuch as the case in Mohit Minerals before the High Court of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. 2022 (61) G.S.T.L. 257 (SC) wherein a three Judges Bench of the Supreme Court by a decision dated 19 May 2022 has upheld the decision in terms of the conclusions as recorded in paragraph 147 of the said decision, which read thus: 147 We are in agreement with the High Court to the extent that a tax on the supply of a service, which has already been included by the legislation as a tax on the composite supply of goods, cannot be allowed. E Conclusion 148. Based on the above discussion, we have reached the following conclusion: (i) The recommendations of the GST Council are not binding on the Union and States for the following reasons: (a) The deletion of Article 279B and the inclusion of Article 279(1) by the Constitution Amendment Act 2016 indicates that the Parliament intended for the recommendations of the GST Council to only have a persuasive value, particularly when interpreted along with the objective of the GST regime to foster cooperative federalism and harmony between the constituent units; (b) Neither does Article 279A begin with a non-obstante clause nor does Article 246A state that it is subject to the provisions of Article 279A. The Parliament and the State leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f services of transportation, insurance, etc. in a CIF contract, a separate levy on the Indian importer for the supply of services by the shipping line would be in violation of Section 8 of the CGST Act. 149 For the reasons stated above, the appeals are accordingly dismissed. 150 Pending application(s) if any, stand disposed of. 4. We may observe that in Mohit Minerals (supra) the petitioner s case before the High Court of Gujarat was a case where the petitioner was importing coal from various countries on FOB (Free on Board) and CIF (sum of Cost, Insurance and Freight) basis, as clearly set out in paragraph 15 of the said decision. Such decision of the High Court of Gujarat has been upheld by the Supreme Court. This apart in the petitioner s own case in the proceedings in Agarwal Coal Corporation Pvt. Ltd. Vs. Union of Indian Anr. Writ Petition (C) No. 8720/2017, order dt. 24.8.2022 which were filed before the Delhi High Court assailing the same notification, the Division Bench of the Delhi High Court disposed of the said writ petition in favour of the petitioner in terms of the following order:- ORDER 24.08.2022 Learned counsel for the petitioners states that the matter in issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Tax may not be recovered under Section 74(1) of the Central Goods and Services Act, 2017 (for short CGST Act ) alongwith interest and penalty on the ocean trade service. This Court following the decision of the High Court of Gujarat in Mohit Minerals (supra) as also the decision of the Supreme Court in Union of India Vs. Mohit Minerals Pvt. Ltd. (supra) allowed the petitioner s proceedings, setting aside the show cause notice. The relevant extract of the said decision reads thus:- 3. The Petitioner is a company who is engaged in manufacture of vegetable edible oil, is registered under the goods and services tax holding a duty registration. A show cause notice issued by the Respondent No. 2 dated 31 st March 2019 to the Petitioner called upon the Petitioner as to why Integrated Goods and Service Tax (IGST) amounting Rs. 4,13,47,167/- be not recovered from the Petitioner under Section 74(1) of Central Goods and Services Act, 2017 alongwith interest and penalty as specified. The gist of the allegation against the petitioner is found in paragraph No. 2 of the show cause notice which reads thus: 2. During the course of GST audit conducted on the records of the assessee for the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly correct. 5. Learned counsel for the Petitioner informs that the Hon'ble Supreme Court has now rendered the decision in case of Union of India v. Mohit Minerals (P.) Ltd. [2022] 138 taxmann.com 331/92 GST 101/(61) GSTL 257 (S.C.) and upheld the judgment of the Gujarat High Court in Mohit Minerals (P.) Ltd. (supra). Learned counsel for the Respondents states that though this position is correct, the Petitioner can point it out to the Commissioner fact in response to the show cause notice. 6. We do not find any purpose in the case, either for the Petitioner or the Commissioner to invest their time and energy on the issue, if the position on which the show cause notice is founded, already stands concluded in the light of the decision of the Hon'ble Supreme Court. 7. Accordingly, writ petition is allowed and the impugned show cause notice dated 31 March 2019 is quashed and set aside. 7. Thus, in our opinion, the present petition also needs to be allowed considering the decision in the case of Mohit Minerals (supra). 8. Before parting, we may also note a submission being made on behalf of the respondent namely that the decision in Mohit Minerals (supra) needs to be applied onl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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