The main legal point established in the judgment is the interpretation of the exemption notification under the CGST Act, 2017 and the finding that the interest component of the EMI of the loan advanced by the bank is not exempted under the said notification dated June 28, 2017.

JUDGMENT :

1. The borrower has filed this Writ petition praying for a declaration that the interest component of the Equated Monthly Instalments (for short “EMI”) of the loan granted by the respondent Bank is exempted from levy of Integrated Goods and Service Tax (for short “IGST”) and for a direction upon the Bank and the IGST authorities to refund the IGST collected from the petitioner.

2. The facts leading to the filing of the writ petition are as follows- Petitioner is holder of a valid Citi Bank Credit Card issued by the respondent no. 1/Bank. He received an email communication on 21.02.2019 from the Bank offering an instant loan of Rs. 6,50,000/- at 13% interest above the credit limit. A similar email communication was also received on 28.02.2019. Petitioner expressed his willingness to the said offer by a SMS communication on 28.02.2019. On 02.03.2019, petitioner received an email communication from the Bank that a loan on his credit card has been disbursed and is repayable in EMIs along with an additional initial interest amount. Thereafter a demand draft of Rs. 6,50,000/- was dispatched to the home address of the petitioner and he encashed the said draft. Upon receipt of the credit card statements of two successive periods, the petitioner detected that IGST @ 18% was charged on the initial interest as well as interest component of EMI. Petitioner by several letters protested against charging of IGST on the interest component of the EMI and requested the Bank to reverse the said IGST charges.

Since the respondents did not take any steps for reversing the said IGST charges and was continuing to charge IGST, this writ petition was filed.

3. The learned advocate for the petitioner contended that grant of loan by the bank to the petitioner squarely comes within the meaning of “supply” as provided in Section 7 of the Central Goods and Services Tax Act, 2017 (for short CGST Act) and the interest component of the loan which is included in the EMI is the value of such supply of service of granting the loan. Such consideration for supply of service by way of granting loan cannot be said to be a credit card service merely because the EMI is indicated in the credit card statement. Learned Advocate for the petitioner contended that the interstate supply of services by way of extending loans for the consideration of payment of interest is exempted from levy of Integrated Tax as per Serial No. 28 of the Notification No. 9/2017. Integrated Tax (Rate) dated June 28, 2017 issued by the Government of India, Ministry of Finance, Department of Revenue. He contended that the respondent authorities acted de hors the said notification by charging IGST on the interest component of EMI.

4. The learned advocate for the petitioner submitted that while interpreting the exemption notification the Court has to give it the meaning which clearly and plainly flows from the said notification. In support of such contention he relied upon a decision of the Hon’ble Supreme Court of India in the case of Collector of Central Excise and ors. vs. Himalayan Co-operative Milk Product Union Ltd. and Ors. reported at (2000) 8 SCC 642.

5. Mr. K.K. Maiti, learned Counsel representing the respondent no. 4 namely Principal Chief Commissioner of Central Tax raised the point of maintainability of this writ petition on two fold grounds. Firstly, that the reliefs claimed against the respondent no. 1/Bank, not being a nationalized Bank, is not maintainable under Article 226 of the Constitution of India. Secondly, the registered office of the respondent Bank is situated outside the State of West Bengal and as such this Hon’ble Court lacks territorial jurisdiction to entertain and try this writ petition. With regard to the applicability of the Exemption Notification dated June 28, 2017, Mr. Maiti submitted that the loan was extended to the petitioner on the basis of the credit card issued by the Bank and the interest component of EMI is on account of Credit Card services which i