In the case of Sunrise Timply Company Pvt. Ltd. v. Union of India & Ors., the Calcutta High Court addressed the issue of Integrated Goods and Services Tax (IGST) on ocean freight for the period from July 2017 to March 2018. The petitioner was issued a show-cause notice under Section 74 for IGST on ocean freight under reverse charge, which they contested by relying on the Supreme Court judgment in Mohit Minerals Pvt. Ltd., arguing that such a levy was unconstitutional. Despite the petitioner's submissions and a personal hearing, the Proper Officer confirmed the tax demand, asserting that the Supreme Court's ruling was applicable only from a future date. The petitioner's subsequent rectification application was also denied, prompting them to file a writ petition.
The central question was whether IGST on ocean freight could be imposed for periods before October 1, 2023, despite the Supreme Court's decision in Mohit Minerals Pvt. Ltd. The Calcutta High Court ruled that judgments from constitutional courts that declare a levy unconstitutional are retrospective unless explicitly stated otherwise.
Read More: Madras High Court: Fresh proceedings barred after issuance of ASMT-12; Mere misclassification of ITC between CGST/SGST and IGST heads does not result in revenue loss [Order attached]
The court found that the Proper Officer made an error by interpreting the Mohit Minerals judgment as prospective, simply because the related notification was amended later. The amendment to Notification No. 10/2017 could not supersede the Supreme Court's statutory interpretation. Consequently, the court deemed the levy of IGST on ocean freight for the specified period as lacking jurisdiction and set aside both the original adjudication order and the rectification rejection order.
Parties: Sunrise Timply Company Pvt. Ltd. v. Union of India & Ors.
Order Date: 19 January 2026
Facts –
- The petitioner was issued a show-cause notice under Section 74 seeking IGST on ocean freight under reverse charge for the period July 2017 to March 2018.
- The petitioner consistently relied on the Supreme Court judgment in Mohit Minerals Pvt. Ltd., contending that IGST on ocean freight is unconstitutional.
- Despite submissions and personal hearing, the Proper Officer passed an order confirming tax demand, holding that the Supreme Court ruling applied only prospectively.
- A rectification application was also rejected, leading the petitioner to file the writ petition.
Issue –
- Whether IGST on ocean freight can be levied for periods prior to 01 October 2023 despite the Supreme Court judgment in Mohit Minerals Pvt. Ltd?
Order –
- The Court held that judgments of constitutional courts declaring a levy unconstitutional apply retrospectively unless expressly made prospective.
- The Proper Officer erred in holding that Mohit Minerals applies only prospectively merely because the notification was amended later.
- Amendment to Notification No. 10/2017 cannot override statutory interpretation settled by the Supreme Court.
- The levy of IGST on ocean freight for the relevant period was held to be without jurisdiction.
- Both the original adjudication order and the rectification rejection order were set aside.
