The court ruled that imposing IGST on service components of composite supplies is impermissible under GST law, reaffirming the non-binding nature of GST Council recommendations.

ORDER :

This writ petition has been filed by the petitioner seeking the following reliefs:-

"1. Declare the provisions of section 96(2) of the RGST Act and section 96 of the CGST Act to the extent it prescribes for constitution of the AAR which consists of members from amongst the officers of central tax and officers of state tax and Rule 103 of the CGST Rules and Rule 103 of RGST Rules as arbitrary and unconstitutional and accordingly quash impugned Order dated 22.12.2017 (Annexure-4);

2. Declare the provisions of section 99 of the CGST Act and Section 99 of the RGST Act to the extent it prescribes for constitution of the AAAR which consists of Chief commissioner of central tax and Commissioner of state tax as its members as arbitrary and unconstitutional and accordingly quash impugned notification dated 22.12.2017 (Annexure-5);

3. Declare Entry 10 of the Impugned Notification dated 28.06.2017 (Annexure-1) to the extent it notifies 'importer' as the 'recipient' of service for the levy of IGST on reverse charge mechanism and authorizing levy on the Importer in case of import of goods on CIF basis as ultravires to section 5(3) of the IGST Act, 2017;

4. Declare proviso to section 5(1) of the IGST Act, 2017, to the extent it provides for the levy and collection of IGST on goods imported into India in accordance with the provisions of Section 3 of the Customs Tariff Act, 1975 on the Value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962 without excluding the value of the Transportation Services from the value of imported goods and thereby resulting into double taxation, as arbitrary and violative of Article 14 and 265 of Constitution of India;

5. Grant refund of the IGST paid by the petitioner till date which may become due consequential to the granting of the above prayers.

6. Quash/set aside/modify Impugned Advance Ruling No.RAJ/AAR/2018-19/14 passed by Authority for Advance Ruling of State of Rajasthan (Annexure-3);

7. Grant such further relief/relief(s), which in the facts and circumstances of this case, may do complete justice to the petitioner;

8. Allow the Writ Petition with costs;

9. Any other order/direction, which Hon'ble court deems appropriate."

2. It is submitted by learned counsel for the petitioner that the petitioner is not pressing relief Nos.1, 2 and 4. For relief Nos.3, 5 and 6, submissions have been made that the issue stands squarely covered by judgment of Hon'ble Supreme Court in Union of India v. Mohit Minerals (Pvt.) Limited : (2022) 10 SCC 700, wherein, from the indication made in para 169 to 171, the reliefs as claimed by the petitioner would be available.

3. The submissions made by counsel for the petitioner are not disputed by learned ASG, appearing for the respondents.

4. In the case of Mohit Minerals (supra), Hon'ble Supreme Court, inter alia observed and directed as under:-

"169. The High Court in the impugned judgment has observed that:

"What has led to the present day problems in the implementation of the GST:

133. The GST is implemented by subsuming various indirect taxes. The difficulty which is being experienced today in proper implementation of the GST is because of the erroneous misconception of law, or rather, erroneous assumption on the part of the delegated legislation that service tax is an independent levy as it was prior to the GST and it go vivisect the transaction of supply to levy more taxes on certain components completely overlooking or forgetting the basic concept of composite supply introduced in the GST legislation and the very idea of levying the GST. Prima facie, it appears that while issuing the impugned notification, the delegated legislature had in mind the provision of the Finance Act, 1994, rather than keeping in mind the object of bringing the GST by making the Constitutional (101st) Amendment Act, 2016 to merge all taxes levied on the goods and services to one tax known as the GST.

134. It appears