The Madurai Bench of the Madras High Court has quashed certain service tax and Integrated GST (IGST) Notifications Nos. 14/2017, 15/2017, and 16/2017 dated April 13, 2017 and Notification Nos. 10/2017-IGST and 8/2017-Integrated Tax (Rate) dated June 28, 2017 imposing reverse charge liability on importers for ocean freight.
The Bench of Dr. Justice Anita Sumanth and Justice C. Kumarappan allowed the petitions filed by Tamil Nadu News Print and Papers Limited (TNPL) under Article 226 of the Constitution, challenging both pre-GST and post-GST notifications issued by the Union Ministry of Finance.
TNPL had challenged Notifications Nos. 14/2017, 15/2017, and 16/2017 dated April 13, 2017, issued under the Finance Act, 1994 (pre-GST regime), and Notification Nos. 10/2017-IGST and 8/2017-Integrated Tax (Rate) dated June 28, 2017 (post-GST regime).
The company contended that these notifications unlawfully imposed a reverse charge mechanism on importers for payment of service tax and IGST on ocean freight, even though they were not recipients of the transportation service in Cost-Insurance-Freight (CIF) contracts. It argued that such levy exceeded the scope of the enabling provisions under Section 68(2) of the Finance Act, 1994 and Sections 1, 7(4), and 5(3) of the IGST Act, 2017, violating Articles 14, 19(1)(g), 245, and 269A of the Constitution.
The Bench noted that the same issue had already been settled in favour of the assessees by multiple High Courts in Sal Steels Ltd. v. Union of India (2020) 37 GSTL 3 (Gujarat), Santhan Textile Pvt. Ltd. v. Union of India (2024) 25 Centax 225 (Bombay), and Eastman Spinning Mills (P) Ltd. v. Union of India, Madras High Court (2025).
In Sal Steels, the Gujarat High Court had held that the impugned notifications were ultra vires the parent legislation and unconstitutional, as they sought to levy tax on importers who were not service recipients. The Madurai Bench adopted the same reasoning.
The bench observed that “in light of the categoric pronouncements of the Gujarat and Bombay High Courts, followed by this Court in Eastman Spinning Mills (P) Ltd., the impugned notifications are quashed. As a result, the show cause notices are also quashed.”
The Court also referenced its earlier ruling in Chennai and Ennore Ports Streamer Agents Association v. Union of India(2023) 7 Centax 63, where it was held that there existed no proper mechanism under Section 68(2) of the Finance Act, 1994, to impose service tax on importers for ocean freight. Although the earlier Bench did not strike down the notifications, it reached the same conclusion—that importers were not liable for the tax.
The Madras High Court reaffirmed that the notifications imposing reverse charge on ocean freight are ultra vires and unconstitutional. The corresponding show cause notices issued to TNPL stand quashed. The writ petitions were allowed, and all connected miscellaneous petitions were closed.
Case Details
Case Title: M/s.Tamil Nadu News Print and Papers Limited Versus UOI
Case No.: W.P.(MD)Nos.8209, 8210, 8217 & 8218 of 2019
Date: 14.10.2025
Counsel For Petitioner: S.Muthuvenkataraman
Counsel For Respondent: P.Subbiah
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