Bombay High Court Upholds The Validity of Provisions Dealing With Place Of Supply Under IGST

The Bombay High Court has upheld the validity of Section 13(8)(b) and Section 8(2), which deal with place of supply under the Integrated Goods and Service Tax Act, 2017 (IGST Act).The Bench of Justice Sunil B. Shukre and Justice Abhay Ahuja has observed that the provisions of Section 13(8)(b) and Section 8(2) of the IGST Act are legal, valid, and constitutional, provided that the provisions of Section 13(8)(b) and Section 8(2) are confined in their operation to the provisions of the IGST Act only and cannot be made applicable for the levy of tax on services under the CGST and MGST Acts.Section 13(8)(b) creates a deeming fiction that in the case of intermediary services, even if the location of the recipient of the services is outside India, for the purpose of the IGST Act, the place of supply shall be the location of the supplier of the intermediary services.Under Section 8(2), a person carrying on a business through a branch, an agency, or a representational office in any territory shall be treated as having an establishment in that territory.The petitioner challenged the vires of Section 13(8)(b) and Section 8(2) of the Integrated Goods and Services Tax Act, 2017.On June 9, 2021, Justice Ujjal Bhuyan held that Section 13(8)(b) of the Integrated Goods and Services Tax Act, 2017 is ultra vires the Act, besides being unconstitutional.Justice Abhay Ahuja held section 13(8)(b) as well as section 8(2) of the IGST Act as constitutionally valid in Writ Petition (L) No. 639 of 2020.In view of the difference of opinion with regard to the constitutionality of Section 13(8)(b) of the IGST Act, Justice Ujjal Bhuyan struck down the constitutional validity of the provision and allowed the petitions, and Justice Abhay Ahuja expressed his disagreement and has rendered his separate opinion.The Chief Justice had referred the matters for the opinion of the third judge, Justice G.S. Kulkarni. Justice G.S. Kulkarni has upheld the constitutional validity of Section 13(8)(b) and Section 8(2) of the IGST Act.The court held that the provisions of Section 13(8)(b) and Section 8(2) of the IGST were legal, valid, and constitutional.Case Title: Dharmendra M. Jani Versus Union of IndiaCase No.: Writ Petition No.2031 Of 2018Citation: 2023 LiveLaw (Bom) 272Date: 06/06/2023Counsel For Petitioner: Bharat RaichandaniCounsel For Respondent: Anil C. SinghClick Here To Read The Order

Bombay High Court Upholds The Validity of Provisions Dealing With Place Of Supply Under IGST

Mariya Paliwala

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