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IN THE HIGH COURT OF DELHI AT NEW DELHI
Manmohan, Manmeet Pritam Singh Arora, JJ.
Uber India Systems Private Limited – Appellant
Versus
Union of India & Anr. – Respondents
W.P.(C) 14048 of 2021, W.P.(C) 14579 of 2021 & CM APPL. 45963 of 2021 & W.P.(C) 14826 of 2021 & CM APPL. 28849 of 2022
Decided On : 12-04-2023
Whether the impugned Notifications withdrawing from the ECOs the benefit of exemption from payment of GST on service of transportation through auto rickshaws and non-air-conditioned stage carriage, which continues to remain available to the individual service providers is violative of Articles 14, 19(1)(g) and 21 of the Constitution?
Fact of the Case:
The impugned Notifications issued by the Respondents withdrew the exemption to the Electronic Commerce Operators (ECOs) granted vide the parent Notification for the aforesaid services. Consequently, with effect from 01.01.2022, with respect to a booking made by a consumer through the electronic platform of an ECO for an auto-rickshaw ride or a bus ride, the `fare' has become exigible to tax.
Finding of the Court:
The impugned Notifications are not violative of Article 14 of the Constitution and fulfil the test of `reasonable classification' [and the impugned Notifications are not ultra vires of the Act of 2017].
Issues: Whether the impugned Notifications arbitrarily create a classification between the ECOs and the individual service providers solely based on the `mode of booking' availed by the consumer for availing the said service; and consequently, discriminates against the ECOs by denying the ECOs the benefit of exemption available to the individual service providers under the parent Notification.
Ratio Decidendi: The impugned Notifications do not create an unreasonable classification on the basis of the `mode of booking' availed by the consumers; the Respondents are empowered to issue the impugned Notifications under Section 9(5) and 11 of the Act of 2017 and we are, therefore, unable to accept the challenge to the constitutional validity of the said notifications.
Final Decision: The present batch of writ petitions are dismissed.
JUDGMENT
Manmeet Pritam Singh Arora, J.
CM APPL. 45963/2021 in W.P.(C) 14579/2021
Exemption allowed, subject to all just exceptions.
Accordingly, present application is disposed of.
W.P.(C) 14048/2021
W.P.(C) 14579/2021
W.P.(C) 14826/2021 & CM APPL. 28849/2022
Factual Background
1. Present writ petitions have been filed by Uber India Systems Private Limited in W.P.(C) No. 14048 of 2021 (`Petitioner 1'), Pragatisheel Auto Rickshaw Driver Union in W.P.(C) No. 14579 of 2021 (`Petitioner 2') and IBIBO Group Private Limited along with Make My Trip (India) Private Limited in W.P.(C) 14826/2021 (collectively referred to as `Petitioner 3'). The petitions have been filed challenging the Clauses (iii) and (iv) of Notification No. 16/2021-Central Tax (Rate) and Clauses 1(i) and 2(i) of Notification No. 17/2021-Central Tax (Rate), both dated 18.11.2021 [`impugned Notifications'], as ultra vires to the Constitution of India (`Constitution') and Section 9(5) and 11 of Central Goods and Service Tax Act, 2017 (`the Act of 2017').
1.1. All these petitions were heard together and are being disposed of by this common judgment.
2. The factual background that has given rise to the present batch of writ petitions are dealt herein under.
2.1. The Respondents issued Notification No. 11/2017 dated 28.06.2017 notifying the rate of tax on supply of services. The relevant portions of Notification No. 11/2017 read as under:
"Notification No. 11/2017-Central Tax (Rate)
New Delhi, the 28th June 2017
G.S.R. 690(E)-In exercise of the powers conferred by sub-section (1), subsection (3) and sub-section (4) of section 9, sub-section (1) of section 11, subsection (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby notifies that the central tax, on the intra-State supply of services of description as specified in column (3) of the Table below, falling under Chapter, Section or Heading of scheme of classification of services as specified in column (2), shall be levied at the rate as specified in the corresponding entry in column (4), subject to the conditions as specified in the corresponding entry in column (5) of the said Table:
Table
| Sl. No. | Chapter Section or Heading | Description of service | Rate (per cent) | Condition |
| (1) | (2) | (3) | (4) | (5) |
| 8 | Heading 9964 (Passenger transport services) | (i) ... | ... | ... |
| (ii) Transport of passengers, with or without accompanied belongings by (a) air conditioned contract carriage other than motorcab; (b) air conditioned stage carriage; (c) radio taxi. Explanation. (a) "contract carriage" has the assigned to it in clause (7) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988); (b) "stage carriage" has the meaning assigned to it in clause (40) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988); (c) "radio taxi" means a taxi including a radio cab, by whatever name called, which is in two-way radio communication with a central control office and is enabled for tracking using Global Positioning System (GPS) or General Packet Radio Service (GPRS). | 2.5% | Provided that credit of input tax charged on goods and services used in supplying the service has not been taken Please refer to Explanation no. (iv) | ||
| ... | ... | ... | ||
| (vi) Transport of passengers by any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient. | 2.5 | Provided that credit of input tax charged on goods and services used in supplying the service, other than the input tax credit of input service in the same line of business (i.e. service procured from another service provider of transporting passengers in a motor vehicle or renting of a motor vehicle), has not been taken. [Please refer to Explanation no. (iv)] | ||
| Or | ||||
| 6 | - |
4. Explanation.-For the purposes of this notification,
(i)...
(ii)...
(iii)...
Wherever a rate has been prescribed in
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