Union of India v. Mohit Mineral (P) Ltd.:

 Mohit Mineral Pvt. Ltd. (hereinafter referred to as “the writ petitioner”) is a Company incorporated under the Companies Act which is a trader of imported and Indian coal. The writ petitioner imports coal from Indonesia, South Africa and also purchases coal from Indian mines. The Finance Act, 2010 with effect from 1-7-2010 levied clean energy cess which was in the nature of a duty of excise on the production of coal and was being collected at the time of removal of raw coal, raw lignite and raw peat from the mine to the factory. The Constitution (One Hundred and Twenty-second Amendment) Bill, 2014 was introduced in the Lok Sabha to seek amendment in the Constitution, inter alia, providing for subsuming of various indirect taxes and Central and States surcharges and cesses so far as they relate to supply of goods and services both on inter-State and intra-State. The Constitution (One Hundred and First Amendment) Act, 2016 was passed to levy goods and services tax. Section 18 of the Amendment Act enabled Parliament to levy a cess for five years to compensate the States for the loss of revenue on account of GST. On 12-4-2017, Parliament enacted three Acts, namely, (1) the Central Goods and Services Tax Act, 2017; (2) the Integrated Goods and Services Tax Act, 2017; and (3) the Goods and Services Tax (Compensation to States) Act, 2017 (hereinafter referred to as “the Compensation to States Act, 2017”). On 4-5-2017, the Taxation Laws (Amendment) Act, 2017 was enacted, whereunder, several cesses including clean energy cess was repealed. The writ petitioner submitted a representation to the GST Council seeking set off of clean energy cess against GST compensation cess.

 The Division Bench of the Delhi High Court passed ad interim order. In the interim order the Division Bench observed that there is a prima facie case made out by the writ petitioner regarding lack of legislative competence of Parliament to enact Compensation to States Act, 2017. The interim order was observed: 

• The Court sees prima facie merit in the contention of the petitioner, based on the history of the abolition of the clean energy cess and the introduction of the GST regime, that the power of Parliament to enact the impugned Act cannot be traced to Section 18 of the Constitution (One Hundred and First Amendment) Act. There is therefore a prima facie case made out as regards the legislative competence of Parliament to enact the impugned Act.
• Another aspect of the matter is that Section 8 of the impugned Act contemplates levy of ‘a cess on such intra-State supplies of goods or services or both’, the same that is provided in Section 9 of the Central Goods and Services Tax Act, 2017 (CGST Act) and such ‘inter-State supply of goods and services or both’ as provided for in Section 5 of the Integrated Goods and Services Tax Act, 2017 (IGST Act). Therefore, it is clear that cess is being levied on the same taxable event that is the subject-matter of the levy under the CGST and IGST Acts viz. supply of goods and services.
• The Court, at this stage, is of the view that, the petitioner has made out a prima facie case for partial ad interim relief subject to conditions. As far as the additional levy on the stocks of coal on which it has already paid the clean energy cess in terms of the FA Act, 2010, the petitioner should not be required to make any further payment. However, on stocks of coal on which no clean energy cess under the FA, 2010 was paid, any payment made in terms of the impugned Act would be subject to the result of this petition. It is ordered accordingly.

 It is made clear that, in the event of the petitioner succeeding in the present petition, the petitioner would be entitled to a refund of amounts of clean energy cess paid under the Act and on such terms as the Court may determine in the final order.

 The petitioner's submission that the petitioner should be given the credit to the extent of payment of clean energy cess cannot be accepted. The clean energy cess and States Compensation Cess are entirely different from each other, payment of clean energy cess was for different purpose and has no bearing or connection with States Compensation Cess. Giving credit or set off in the payment is legislative policy which had to be reflected in the legislative scheme. The Compensation to States Act, 2017 or Rules framed thereunder does not indicate giving of any credit or set off of the clean energy cess already paid. Thus, claim of the petitioner that he is entitled for set off in payment of Compensation to States Cess to the extent he had already paid clean energy cess cannot be accepted.