UNION OF INDIA & ANR. versus MOHIT MINERAL PVT. LTD.

Citation: [2018] 13 S.C.R. 139 · Decided: 03-10-2018 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Leave Granted & Disposed off

Cited by 3 judgment(s) · cites 6 · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
139
UNION OF INDIA & ANR.
v.
MOHIT MINERAL PVT. LTD.
(Civil Appeal No. 10177 of 2018)
OCTOBER 03, 2018
[A. K. SIKRI AND ASHOK BHUSHAN, JJ.]
Goods and Services Tax (Compensation to States) Act, 2017:
Validity of – Held: Is constitutionally valid – Article 270
empowers Parliament to levy any cess by law and s. 18 of the
Constitution (One Hundred and First Amendment) Act, 2016
expressly empowers Parliament shall, by law on the recommendation
of the Goods and Services Tax Council, provide for compensation
to the states for loss of revenue arising on account of implementation
of the goods and services tax and expression law used therein is of
wide import which includes levy of any cess for the above purpose
– Thus, the 2017 Act is not beyond the legislative competence of the
Parliament – Furthermore, the objectives in statements of objects
and reasons of Constitution (One Hundred and First Amendment)
Bill, 2014 was conferring concurrent taxing powers upon Parliament
and the State Legislature to make laws for levying goods and services
tax – Article 246A(1) empowers the Parliament to make laws with
respect to goods and services tax – Power to make law is not general
power related to a general entry rather it specifically relates to
goods and services tax – When express power is there to make law
regarding goods and services tax, it cannot be comprehended that
how such power shall not include power to levy cess on goods and
services tax – Thus, the 2017 Act does not violate Constitution (One
Hundred and First Amendment) Act, 2016 nor is against the objective
of Constitution (One Hundred and First Amendment) Act, 2016 –
2017 Act is not a colourable legislation – Goods and Services Tax
Compensation Cess Rules, 2017 – Constitution of India.
Levy of Compensation to States Cess and GST on the same
taxing event – Permissibility of – Held: Two taxes/imposts which
are separate and distinct imposts and on two different aspects of a
transaction are permissible as in law there is no overlapping – Goods
139
[2018] 13  S.C.R. 139
A
B
C
D
E
F
G
H
140
SUPREME COURT REPORTS
[2018] 13  S.C.R.
and Services Tax imposed under the 2017 Act and levy of cess on
such intra-State supply of goods and services or both as provided
under the Act and such supply of goods and services or both as
part of the Act are two separate imposts in law and are not prohibited
by any law so as to declare it invalid – Thus, it cannot be said that
levy of Compensation to States Cess on same taxable event is not
permissible – Levy of compensation to States Cess is an increment
to goods and services tax which is permissible in law.
Clean Energy Cess paid by the petitioner on the stocks of
coal till 30.06.2017 – Entitlement to set off the same in payment of
Compensation to States Cess – Held: Clean Energy Cess and the
States Compensation Cess are collected for wholly different purposes
– Clean Energy Cess was levied and collected for the purposes of
financing and promoting clean energy initiatives, funding research
in the area of clean energy whereas States Compensation Cess is
collected to provide for compensation to the States for the loss of
revenue arising on account of implementation of the goods and
services tax – Giving credit or set off in the payment is legislative
policy which had to be reflected in the legislative scheme –
Compensation to States Act, 2017 or Rules framed thereunder does
not indicate giving of any credit or set off of the Clean Energy Cess
already paid till 30.06.2017 – Thus, the petitioner not entitled for
set off in payment of Compensation to States Cess to the extent he
had already paid Clean Energy Cess.
Allowing the appeals and dismissing the transferred cases,
the Court
HELD:
Whether the Compensation to States Act, 2017 is beyond the
legislative competence of Parliament?
1.1 Article 246A provides that “notwithstanding anything
contained in Articles 246 and 254, Parliament, and, subject to
clause(2), the Legislature of every State, have power to make
laws with respect to goods and services tax imposed by the Union
or by such State”. In the instant case, the concern is with a cess
imposed by Compensation to States Act, 2017. The Act by Section
8 levies and authorizes collection of cess. [Para 35][161-A-B]
A
B
C
D
E
F
G
H
141
Shinde Brothers Etc. v. Deputy Commissioner, Raichur
& Others Etc. AIR 1967 SC 1512 : [1967] SCR 548;
India Cement Ltd. & Others v. State of Tamil Nadu &
Others (1990) 1 SCC 12 : [1989] 1 Suppl. SCR 692;

Excerpt shown. Read the full judgment & AI analysis in Lexace.