Case Note & Summary
The judgment concerns two writ petitions challenging the vires of section 13(8)(b) and section 8(2) of the Integrated Goods and Services Tax Act, 2017 (IGST Act). The petitioners, Dharmendra M. Jani and A.T.E. Enterprises Private Limited, contended that these provisions, which determine the place of supply for goods imported into or exported from India, are ultra vires the IGST Act and unconstitutional. The matter was initially heard by a single judge (Justice Ujjal Bhuyan) who, on 9 June 2021, held section 13(8)(b) to be ultra vires and unconstitutional. However, the division bench of Justices Sunil B. Shukre and Abhay Ahuja, in the final judgment dated 6 June 2023, reversed that view. The court held that section 13(8)(b) and section 8(2) are not ultra vires the IGST Act or unconstitutional. The court reasoned that the provisions are consistent with the scheme of the IGST Act and the constitutional framework. The petitions were dismissed, and the earlier order of the single judge was set aside. The decision upholds the validity of the provisions, affirming that the place of supply rules for imports and exports are within the legislative competence and do not violate any constitutional mandate.
Headnote
A) Constitutional Law - Vires of Statute - Section 13(8)(b) and Section 8(2) of IGST Act, 2017 - Challenge to constitutional validity - The court examined whether the provisions determining place of supply for goods imported into or exported from India are ultra vires the Act and unconstitutional. Held that the provisions are valid and not ultra vires, reversing the earlier single judge's finding (Paras 1-3).
Issue of Consideration
Whether section 13(8)(b) and section 8(2) of the Integrated Goods and Services Tax Act, 2017 are ultra vires the Act and unconstitutional.
Final Decision
The division bench held that section 13(8)(b) and section 8(2) of the Integrated Goods and Services Tax Act, 2017 are not ultra vires the Act or unconstitutional. The writ petitions are dismissed. The earlier order of the single judge is set aside.
Law Points
- Constitutional validity of tax provisions
- Place of supply of goods
- Import and export
- Integrated Goods and Services Tax
- Vires of statute
Case Details
2023 LawText (BOM) (06) 143
Writ Petition No.2031 of 2018 and Writ Petition (L.) No.639 of 2020
Sunil B. Shukre, Abhay Ahuja
Mr. Bharat Raichandani with Mr. Rishabh Jain i/b.UBR Legal for Petitioner in WP No.2031/2018; Mr. Abhishek Rastogi with Mr. Pratyushprawa Saha, Mr. Mahir Chablani, Ms. Kanika Sharma and Mr. Marmik Kamdar i/b. Khaitan & Co. for Petitioner in WP(L.) No.639/2020; Mr. Anil C. Singh, ASG with Mr. Pradeep Jetly, Senior Advocate, Mr. J.B. Mishra and Mr. Aditya Thakkar and Mr. Dhananjay B. Deshmukh for Respondent/UOI in both the Writ Petitions; Ms. Jyoti Chavan, AGP for State in WP No.2031/2018; Mr. Dushyant Kumar, AGP for State in WP(L) No.639/2020
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Nature of Litigation
Writ petitions challenging the vires of provisions of the Integrated Goods and Services Tax Act, 2017.
Remedy Sought
Declaration that section 13(8)(b) and section 8(2) of the IGST Act are ultra vires and unconstitutional.
Filing Reason
Petitioners contended that the provisions determining place of supply for imported/exported goods are unconstitutional.
Previous Decisions
Single judge (Justice Ujjal Bhuyan) on 9 June 2021 held section 13(8)(b) ultra vires and unconstitutional.
Issues
Whether section 13(8)(b) of the IGST Act is ultra vires the Act and unconstitutional?
Whether section 8(2) of the IGST Act is ultra vires the Act and unconstitutional?
Submissions/Arguments
Petitioners argued that the provisions are ultra vires and unconstitutional.
Respondents (Union of India and State) defended the validity of the provisions.
Ratio Decidendi
The provisions of section 13(8)(b) and section 8(2) of the IGST Act are valid and not ultra vires the Act or unconstitutional. The court reversed the single judge's finding and upheld the constitutional validity of the provisions.
Judgment Excerpts
The principal challenge in both these petitions is to the vires of section 13(8)(b) and section 8(2) of the Integrated Goods and Services Tax Act, 2017.
Thus having regard to the discussions made above and upon thorough consideration, we have no hesitation in holding that section 13(8)(b) of the Integrated Goods and Services Tax Act, 2017 is ultra vires the said Act besides being unconstitutional.
Similar view holding section 13(8)(b) of the IGST Act to be ultra-vires and unconstitutional
Procedural History
Writ petitions filed in 2018 and 2020 challenging vires of IGST provisions. Single judge (Justice Ujjal Bhuyan) on 9 June 2021 held section 13(8)(b) ultra vires. Division bench heard the matter and delivered final judgment on 6 June 2023, reversing the single judge's decision and upholding the validity of the provisions.
Acts & Sections
- Integrated Goods and Services Tax Act, 2017: 13(8)(b), 8(2)
