IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27^TH DAY OF JANUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 19754 OF 2019 (T-RES)

BETWEEN:

M/S KONKAN SPECIALTY POLY PRODUCTS PVT. LTD. (UNIT-5)

131 (B) BAIKAMPADY INSUSTRIAL AREA MANGALURU-575 011 REP. BY ITS SENIOR VICE PRESIDENT MR. M. RAGHAVENDRA PRABHU AGED ABOUT 50 YEARS S/O M. VASUDEVA PRABHU.

…PETITIONER (BY SRI. P B HARISH., ADVOCATE AND SRI. MOHAN MAIYA G. L., ADVOCATE)

AND:

1. UNION OF INDIA Digitally MINISTRY OF FINANCE signed by (DEPARTMENT OF REVENUE)

VIDYA G R Location:

NO.137, NORTH BLOCK HIGH NEW DELHI-110 001 COURT OF REP. BY ITS SECRETARY.

KARNATAKA

2. UNION OF INDIA MINISTRY OF LAW & JUSTICE

4TH FLOOR, A WING RAJENDRA PRASAD ROAD SHASTRI BHAVAN NEW DELHI-110 001 REP. BY ITS SECRETARY.

3. THE SUPERINTENDENT OF CENTRAL TAX & CENTRAL EXCISE, OFFICE OF THE ASSISTANT COMMISSIONER OF CENTRAL GST UDUPI AUDIT CIRCLE, 4TH FLOOR PUNJA BUILDING ANNEXE LALBAGH, MANGALURU-575 003.

4. THE STATE OF KARNATAKA DEPARTMENT OF REVENUE VIDHANA SOUDHA BANGALORE - 560 001 REP. BY ITS PRINCIPAL SECRETARY.

…RESPONDENTS (BY SRI. H. SHANTHIBHUSHAN, DSGI FOR R1 & R2;

SRI. JEEVAN J NEERALGI, ADVOCATE FOR R3;

SMT. JYOTHI M MARADI, HCGP FOR R4)

THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE DIRECTION AGAINST THE RESPONDENTS TO DECLARE IMPUGNED NOTIFICATION 15/2017-ST AND 16/2017-ST DATED APRIL 13, 2017 AS LACKING LEGISLATIVE COMPETENCY, ULTRA VIRES TO THE FINANCE ACT, 1994 VIDE ANNEXURE-A AND B AND HENCE NULL AND VOID AND CONSEQUENTLY TO CALL FOR THE RECORDS OF THE R-3 PERTAINING TO DEMAND NOTICE NUMBERED C.NO.IV/01/11/2018MNG AUDIT GR.31/76/19 DATED 23.01.2019 VIDE ANNEXURE-F ISSUED BY THE R-3 PROPOSING TO LEVY SERVICE TAX ON OCEAN FREIGHT ALONG WITH CONSEQUENTIAL INTEREST AND QUASH THE SAME AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV

ORAL ORDER

Petitioner has called in question the validity of the notifications Nos. 15/2017-ST and 16/2017-ST dated 13.04.2017 at Annexures-A and B on various grounds including that the said notifications lack legislative competency and ultra vires the Finance Act, 1994. Consequently, the petitioner has sought for setting aside of the demand notice at Annexure-F.

2. Petitioner at the time of arguments has submitted that the amount already collected pursuant to proceedings conducted in connection with the notifications at Annexures-A and B are required to be refunded. It is the case of the petitioner that he is a manufacturer in India and makes imports on Cost, Insurance and Freight (CIF) basis. It is further submitted that the foreign supplier bears the cost of freight for the transportation of goods till the port in India. The petitioner it is stated has paid the customs duty on the entire value of Cost, Insurance and Freight. It is further specifically averred that it is the foreign supplier who engages a foreign transporter and petitioner is not involved in this arrangement and the services of the transporter is availed by the foreign supplier. It is accordingly submitted that the service being availed by the foreign supplier, the question of levying any tax by virtue of the notifications impugned does not arise.

3. Insofar as the factual aspects are asserted, the revenue does not controvert such aspects.

4. Petitioner submits that the identical issue had been the subject matter of adjudication before the Gujarat High Court in the case of Messrs Sal Steel Ltd. and one another v. Union of India - (2020) 37 GSTL 3 (Guj) It is submitted that Gujarat High Court has already adjudicated on such issue by the order passed by a Division Bench in the above mentioned matter and the present petition also be disposed of on same terms.

5. Sri. Jeevan J. Neeralgi, learned counsel appearing for the respondents submits that the said order of the Division Bench of the Gujarat High Court is pending in a Special Leave