SC Stays Delhi HC Judgment Which Declared Igst Imposition On Oxygen Concentrators Imported By Individuals As Unconstitutional

Background

• The vacation bench of Hon’ble Justices D. Y. Chandrachud and M. R. Shah was hearing a Special Leave Petition filed by the Ministry of Finance against the Delhi High Court Judgment.
• The Hon’ble Supreme Court stayed the Delhi High Court’s Judgment declaring the imposition of Integrated Goods and Services Tax on oxygen concentrators imported by individuals for personal use as unconstitutional. The HC felt that the imposition of IGST was violative of the right to life.
• The division bench of the High Court comprising of Justices Rajiv Shakdher and Talwant Singh delivered this judgment on May 21st.
• The High Court order came after a Public Interest Litigation filed by an 85-year-old covid patient whose nephew had sent him an oxygen concentrator as a gift from the US. The petitioner had argued that the imposition of IGST on items meant for personal use was violative of Article 14 and also curtailed the right to have oxygen, consequently violating the right to live.
• It was noted by the High Court that the Centre had excused oxygen concentrators imported by the Government agencies from IGST. Given that, it was unreasonable to not extend the same benefit to oxygen concentrators imported by individuals.

Submissions by the Attorney General

• It was submitted by the learned Attorney General K. K. Venugopal appearing for the Ministry that the High Court had “thrown the net very wide” with its declaration.
• When the Hon’ble Judge pointed out that the Central Government has already exempted the IGST for the oxygen concentrators imported by Government agencies, the Attorney General replied that the purpose of such an exemption was to distribute the concentrators to poor and needy people; such a purpose is not there for the concentrators imported by individuals the AG added.
• The Attorney General further informed the bench that on 28th May,in the GST council meeting a decision was taken to constitute a group of ministers to analyze the need for relief to covid related items.
• The Council is set to consider the same issue on 8th June 2021.
• The Government held that the IGST was imposed to maintain evenness with the commercial users and to avoid black-marketing.

Court’s Order

• The bench observed that Exemption granted for imported concentrators imported by the state or state agency is a different category. Can’t class individual imports in the same way.
• Hon’ble Justice M. R. Shah held that it was debatable whether or not Article 14 is applicable to issue a taxation policy.
• After considering the submissions made by the learned Attorney General, the Hon’ble bench passed the stay order. The Court observed that the operation of the impugned judgment passed by the Delhi High Court was stayed.
• The Court also noted that arguable questions were raised by the Ministry in the said petition.
• The Hon’ble Court issued notice returnable in 4 weeks.

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