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

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

The Compensation to States Act, 2017, is within the legislative competence of Parliament, validly enacted under express and residuary constitutional powers, including those introduced by the 101st Constitutional Amendment. The Act does not violate the Constitution nor is it colourable legislation, as it is intended to compensate States for revenue loss arising from GST implementation. The simultaneous levy of GST and Compensation Cess on the same taxing event is permissible as these are separate imposts on different aspects. There is no statutory basis for allowing set off of Clean Energy Cess already paid against Compensation Cess liability, as both levies serve different purposes.

Parties
Appellant: Union of India; Respondent: Mohit Mineral Pvt. Ltd.
Jurisdiction
India
Judgment Date
03 October 2018
Procedural Posture
Civil Appeal / Appeal From High Court Decision and Transferred Cases; Judgment on Merits
Outcome
Appeals allowed, writ petition and transferred case dismissed.
Legal Topics
Legislative Competence, Goods and Services Tax (gst), Compensation to States Act, 2017, Cess and Double Taxation, Set Off/credit for Clean Energy Cess
Constitutional Law Taxation Law Legislative Competence Goods and Services Tax (gst) Compensation to States Act, 2017 Cess and Double Taxation Set Off/credit for Clean Energy Cess

Case Brief

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Parties

Union of India

Appellant

Mohit Mineral Pvt. Ltd.

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Decision and Transferred Cases; Judgment on Merits

Legal Issues

  1. 1 Whether the Goods and Services Tax (Compensation to States) Act, 2017 is constitutionally valid and within the legislative competence of Parliament
  2. 2 Whether the Compensation to States Act, 2017 violates the Constitution (One Hundred and First Amendment) Act, 2016 or is a colourable legislation
  3. 3 Whether the levy of Compensation to States Cess and GST on the same taxing event is permissible in law

Ratio Decidendi

The Compensation to States Act, 2017, is within the legislative competence of Parliament, validly enacted under express and residuary constitutional powers, including those introduced by the 101st Constitutional Amendment. The Act does not violate the Constitution nor is it colourable legislation, as it is intended to compensate States for revenue loss arising from GST implementation. The simultaneous levy of GST and Compensation Cess on the same taxing event is permissible as these are separate imposts on different aspects. There is no statutory basis for allowing set off of Clean Energy Cess already paid against Compensation Cess liability, as both levies serve different purposes.

Court Disposition

Appeals allowed, writ petition and transferred case dismissed.

Orders

  • Writ petition dismissed.
  • Transferred case dismissed.