The petitioner, Skill Lotto Solutions Pvt. Ltd., filed a writ petition challenging the constitutional validity of the imposition of Goods and Services Tax (GST) on lotteries under the Central Goods and Services Tax Act, 2017 and the Integrated Goods and Services Tax Act, 2017. The petitioner contended that the inclusion of “lottery, betting, and gambling” within the definition of “goods” under Section 2(52) of the CGST Act was arbitrary and violative of Article 14 of the Constitution. It was argued that lottery transactions are in the nature of actionable claims and do not constitute “goods” or “services” for taxation purposes.The Supreme Court upheld the validity of the GST levy on lotteries. It held that the definition of “goods” under Section 2(52) of the CGST Act validly includes actionable claims other than money and securities, which covers lottery transactions. The Court ruled that lottery, betting, and gambling are actionable claims and that Parliament has the legislative competence to impose GST on such transactions under Article 246A of the Constitution. The writ petition was dismissed, with liberty granted to the petitioner to pursue remedies available in law. All pending applications, including those for intervention and impleadment, were also disposed of.
Skill Lotto Solutions Pvt. Ltd. v. Union of India & Others 03-12-2020
The petitioner, Skill Lotto Solutions Pvt. Ltd., filed a writ petition challenging the constitutional validity of the imposition of Goods and Services Tax (GST) on lotteries under the Central Goods and Services Tax Act, 2017 and the Integrated Goods and Services Tax Act, 2017. The petitioner contended that the inclusion of “lottery, betting, and gambling” within the definition of “goods” under Section 2(52) of the CGST Act was arbitrary and violative of Article 14 of the Constitution. It was argued that lottery transactions are in the nature of actionable claims and do not constitute “goods” or “services” for taxation purposes.The Supreme Court upheld the validity of the GST levy on lotteries. It held that the definition of “goods” under Section 2(52) of the CGST Act validly includes actionable claims other than money and securities, which covers lottery transactions. The Court ruled that lottery, betting, and gambling are actionable claims and that Parliament has the legislative competence to impose GST on such transactions under Article 246A of the Constitution. The writ petition was dismissed, with liberty granted to the petitioner to pursue remedies available in law. All pending applications, including those for intervention and impleadment, were also disposed of.
The petitioner challenged penalty orders passed under Section 129 of the GST Act on account of an incorrect mention of delivery location in the e-way bill. The factual background showed that all statutory documents accompanied the goods and there was no discrepancy in quantity or value.The Court held that penalty under Section 129 requires existence of mens rea or intent to evade tax. A mere clerical or human error in the e-way bill, without any intention to evade tax, does not justify levy of penalty. The impugned penalty orders were set aside.
M/s Uttam Electric Store vs State of Uttar Pradesh & Ors. 30-09-2020
The petitioner challenged penalty orders passed under Section 129 of the GST Act on account of an incorrect mention of delivery location in the e-way bill. The factual background showed that all statutory documents accompanied the goods and there was no discrepancy in quantity or value.The Court held that penalty under Section 129 requires existence of mens rea or intent to evade tax. A mere clerical or human error in the e-way bill, without any intention to evade tax, does not justify levy of penalty. The impugned penalty orders were set aside.
The petitioner, an unincorporated joint venture, challenged demand orders proposing GST liability in the State of Telangana on the entire contract value, despite execution of works in both Telangana and Maharashtra. The factual background showed that tax deducted at source by the contractee was remitted entirely to Telangana, leading to excess balance in the electronic cash ledger of the petitioner in that State.The Court examined the statutory scheme relating to place of supply and allocation of tax liability in inter-State works contracts. Interim protection was granted earlier, and the matter was considered in the context of allocation of turnover and tax between the States based on actual execution of work.
L & T PES JV vs Assistant Commissioner of State Tax & Ors. 13-03-2020
The petitioner, an unincorporated joint venture, challenged demand orders proposing GST liability in the State of Telangana on the entire contract value, despite execution of works in both Telangana and Maharashtra. The factual background showed that tax deducted at source by the contractee was remitted entirely to Telangana, leading to excess balance in the electronic cash ledger of the petitioner in that State.The Court examined the statutory scheme relating to place of supply and allocation of tax liability in inter-State works contracts. Interim protection was granted earlier, and the matter was considered in the context of allocation of turnover and tax between the States based on actual execution of work.
The respondent, Mohit Minerals Pvt. Ltd., filed a writ petition before the Delhi High Court challenging the levy of Integrated Goods and Services Tax (IGST) on ocean freight under the reverse charge mechanism. The contention was that such levy resulted in double taxation since the importer was already paying IGST on the entire value of goods, including freight, under the Customs Valuation Rules. The High Court ruled in favor of the respondent, holding the levy to be unconstitutional.The Supreme Court considered appeals filed by the Union of India against the High Court’s decision. After examining the issues, the Court held that the levy of IGST on ocean freight under reverse charge was not sustainable as it led to double taxation and went beyond the scope of legislative competence. The writ petition was dismissed, and both civil appeals filed by the Union of India were allowed. The Court ordered that the parties shall bear their own costs and disposed of all pending applications accordingly.
Union of India & Another v. Mohit Minerals Pvt. Ltd. 03-10-2018
The respondent, Mohit Minerals Pvt. Ltd., filed a writ petition before the Delhi High Court challenging the levy of Integrated Goods and Services Tax (IGST) on ocean freight under the reverse charge mechanism. The contention was that such levy resulted in double taxation since the importer was already paying IGST on the entire value of goods, including freight, under the Customs Valuation Rules. The High Court ruled in favor of the respondent, holding the levy to be unconstitutional.The Supreme Court considered appeals filed by the Union of India against the High Court’s decision. After examining the issues, the Court held that the levy of IGST on ocean freight under reverse charge was not sustainable as it led to double taxation and went beyond the scope of legislative competence. The writ petition was dismissed, and both civil appeals filed by the Union of India were allowed. The Court ordered that the parties shall bear their own costs and disposed of all pending applications accordingly.
