Union Of India vs Mohit Mineral Pvt Ltd

7. Mohit Mineral Pvt. Ltd. (hereinafter referred to as the 'writ   petitioner')   is   a   Company   incorporated   under   the Companies Act which is a trader of imported and Indian coal. The writ petitioner imports coal from Indonesia, South Africa and  also   purchases   coal  from   Indian  mines.   The   Finance   Act, 2010   with   effect   from   01.07.2010   levied   Clean   Energy   Cess which was in the nature of a duty of excise on the production of coal and was being collected at the time of removal of raw coal, raw lignite and raw peat from the mine to the factory. The   Constitution   (One   Hundred   and   Twenty­Second   Amendment) Bill, 2014 was introduced in the Lok Sabha to seek amendment in   the   Constitution,   inter   alia,   providing   for   subsuming   of various indirect taxes and Central and States surcharges and cesses so far as they relate to supply of goods and services both   on   inter­State   and   intra­State.   The    Constitution   (One Hundred   and   First   Amendment)   Act,   2016   was   passed   to   levy goods   and   services   tax.   Section   18   of   the   Amendment   Act enabled   the   Parliament   to   levy   a   cess   for   five   years   to compensate the States for the loss of revenue on account of GST. On 12.04.2017, Parliament enacted three Acts, namely, (1) The   Central   Goods   and   Services   Tax   Act,   2017;   (2)   The Integrated Goods and Services Tax Act, 2017; and (3) The Goods 5 and   Services   Tax   (Compensation   to   States)   Act,   2017 (hereinafter   referred   to   as   “Compensation   to   States   Act, 2017”). On 04.05.2017, the axation Laws (Amendment) Act, 2017 was enacted, whereunder, several cesses including Clean Energy Cess   was   repealed.   The   writ   petitioner   submitted   a representation   to   the   GST   Council   seeking   set   off   of   Clean Energy Cess against GST Compensation Cess. Writ Petition (C) No.7459 of 2017 was filed by Mohit Minerals Pvt. Ltd. in Delhi High Court praying for following reliefs:

(b) subsuming of State Value Added Tax/Sales Tax, Entertainment   Tax   (other   than   the   tax   levied by   the   local   bodies),   Central   Sales   Tax (levied   by   the   Centre   and   collected   by   the States),   Octroi   and   Entry   tax,   Purchase   Tax, Luxury   tax,   Taxes   on   lottery,   betting   and gambling;   and   State   cesses   and   surcharges   in so far as they relate to supply of goods and services;

48.   We   now   come   to   Issue   No.2   and   Issue   No.3,   which, being interconnected, are taken up together.

53.  The above judgment has no application in the facts of the case.  The case of the Union is not that cess is a fee. Rather contention is that it is increment to the goods and services tax.   We having already held that State compensation cess is “with respect to” goods and services tax, it is a tax.

Ans.3 ­ The Compensation to States Act is not a colourable legislation.

Whether   levy   of   Compensation   to   States   Cess   and   GST  on  the same taxing event is permissible in law? (Issue No.4)

60.  The   principle   is   well   settled   that   two   taxes/imposts which are separate and distinct imposts and on two different aspects of a transaction are permissible as “in law there is 43 no overlapping”.

64. We,   thus,   do   not   find   any   substance   in   the   submission that levy of Compensation to States Cess on same taxable event is not permissible.

We, thus, answer Issue No.5 in the following manner:

68. In view of the foregoing discussions, we do not find any merit   in   the   writ   petition.  The  writ   petition   is   dismissed. The transferred case is accordingly dismissed. Both the civil appeals are allowed. Parties shall bear their own costs.