UNION OF INDIA & ANR versus M/S MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR

Citation: [2022] 9 S.C.R. 300 · Decided: 19-05-2022 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Dismissed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 9 S.C.R.
UNION OF INDIA & ANR.
v.
M/s MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR
(Civil Appeal No. 1390 of 2022)
MAY 19, 2022
[DR. DHANANJAYA Y CHANDRACHUD, SURYA KANT
AND VIKRAM NATH, JJ.]
Constitution of India – Articles 246A and 279A – Constitution
(One Hundred and First Amendment Act) 2016 – Central Goods
and Services Tax Act, 2017 – Integrated Goods and Services Tax
Act, 2017 – Recommendations of Goods and Services Tax Council
– Nature of – Held: Recommendations of the GST Council are not
binding on the Union and States – Deletion of Art. 279B and the
inclusion of Art. 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
– Neither does Art. 279A begin with a non-obstante clause nor does
Article 246A state that it is subject to the provisions of Article 279A
– Parliament and the State legislatures possess simultaneous power
to legislate on GST – Art. 246A does not envisage a repugnancy
provision to resolve the inconsistencies between the Central and
the State laws on GST – The ‘recommendations’ of the GST Council
are the product of a collaborative dialogue involving the Union
and States – They are recommendatory in nature – To regard them
as binding edicts would disrupt fiscal federalism, where both the
Union and the States are conferred equal power to legislate on
GST – Government while exercising its rule-making power under
the provisions of the CGST Act and IGST Act is bound by the
recommendations of the GST Council – However, that does not mean
that all the recommendations of the GST Council made by virtue of
the power Art. 279A (4) are binding on the legislature’s power to
enact primary legislations.
Constitution of India – Constitution (One Hundred and First
Amendment Act) 2016 – Articles 246 A and 279A – Central Goods
300
[2022] 9 S.C.R. 300
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and Services Tax Act, 2017 – ss.2(30), 2(93), 8 – Integrated Goods
and Services Tax Act, 2017 – ss.2(11), 5(3), 13(9) – Impugned
notifications (Notification 8/2017 and 10/2017) issued by Central
Government on the advice of the GST Council levied an integrated
tax at the rate of 5 per cent on the supply of specified services,
including transportation of goods, in a vessel from a place outside
India up to the customs station of clearance in India and categorized
the recipient of services of supply of goods by a person in a non-
taxable territory by a vessel to include an importer u/s. 2(26) of the
Customs Act, 1962 – Respondents-importers of non coking coal on
a Cost-Insurance-Freight (CIF) basis, filed writ petition challenging
the notifications – High Court held that the impugned notifications
are unconstitutional for exceeding the powers conferred by the IGST
Act and the CGST Act – On appeal, held: Government in exercise
of its power u/s.5(3) of the IGST Act issued the impugned Notification
10/2017 specifying the ‘categories of the supply’ which shall be
subject to reverse charge – The notification, besides specifying the
criteria also mentioned the corresponding recipient in those
categories – The IGST Act and the CGST Act define reverse charge
and prescribe the entity that is to be taxed for these purposes – The
specification of the recipient- in this case the importer- by Notification
10/2017 is only clarificatory – The Government by notification did
not specify a taxable entity different from that which is prescribed
in s.5(3) of the IGST Act for the purposes of reverse charge – The
impugned notification 10/2017 clearly specifies a taxable person
who is liable to pay a reverse charge that is envisaged in the statute
– Thus, the impugned notifications cannot be invalidated for an
alleged failure to identify a taxable person – Further, the impugned
notification 8/2017 cannot be struck down for excessive delegation
when it prescribes 10 per cent of the CIF value as the mechanism
for imposing tax on a reverse charge basis – Also, Constitution
Bench decision in GVK Industries recognises the power of Parliament
to legislate over events occurring extra-territorially – The only
requirement imposed is that such an event must have a real
connection to India – In the present case, the impugned levy on the
supply of transportation service by the shipping lin

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