Madras High Court Sets Aside IGST Ocean Freight Orders Following Supreme Court's Ruling in Union of India v. Mohit Minerals Private Limited

Background and Overview

The Madurai Bench of the Madras High Court, constituted by Justice M. Dhandapani and Justice N. Dilip Kumar, disposed of a batch of writ petitions through a common order dated 12 August 2026. The petitions — W.P.(MD) Nos.10823 and 10309 of 2020 along with W.P.(MD) Nos.27785 to 27793 of 2022 — were collectively decided on the ground that the legal controversy at their core was directly governed by the Supreme Court's authoritative pronouncement in Union of India v. Mohit Minerals Private Limited, reported in [2022 (61) G.S.T.L. 257 SC].

The High Court allowed all the writ petitions and quashed the challenged orders, following the binding ratio laid down by the Supreme Court on the question of levying Integrated Goods and Services Tax (IGST) on ocean freight under the Reverse Charge Mechanism (RCM) in the context of Cost, Insurance and Freight (CIF) contracts.

Nature of the Challenges Before the Court

The writ petitions brought two distinct categories of grievances before the Madurai Bench:

Challenge to the Notifications

The first set of petitions — W.P.(MD) Nos.10823 and 10309 of 2020 — directly attacked:

  • Sl.No.10 of Notification No.10/2017-Integrated Tax (Rate) dated 28.06.2017, and
  • Sl.No.9(ii) of Notification No.8/2017-Integrated Tax (Rate) dated 28.06.2017

These notifications were assailed as null, void, and unconstitutional on the ground that they violated:

  • Articles 245 and 269A of the Constitution of India
  • Sections 1, 7(4) and 5(3) of the Integrated Goods and Services Tax Act, 2017

The core argument was that these notifications, by purporting to levy IGST separately on the ocean freight component of CIF transactions, exceeded the legislative competence conferred under the IGST Act and were repugnant to the constitutional framework governing GST.

Challenge to Adjudication and Appellate Orders

The remaining petitions — W.P.(MD) Nos.27785 to 27793 of 2022 — were directed against adjudication orders and orders passed in appeal, which had confirmed tax demands levied on ocean freight under the RCM. These petitions also encompassed claims for refund of amounts that the assessees stated had been paid under CGST/SGST, rather than under IGST as demanded by the authorities.

Submissions at the Hearing

When the matters were taken up, counsel for the petitioners submitted that the entire controversy stood squarely covered by the Supreme Court's decision in Union of India v. Mohit Minerals Private Limited, [2022 (61) G.S.T.L. 257 SC]. It was further pointed out that in the wake of that judgment, a series of orders had already been passed by Coordinate Division Benches — both at the Principal Seat and the Madurai Bench of the Madras High Court — setting aside demands imposed on account of ocean freight taxation.

Reliance on Coordinate Bench Order

To reinforce this position, counsel produced the order dated 13.10.2025 passed in W.P.(MD) No.3129 of 2022 by a Coordinate Bench of the Madurai Bench itself. That earlier order had already applied the Supreme Court's ruling and quashed a show cause notice issued by the Assistant Commissioner of Central GST & Central Excise, dated 15.12.2021. The High Court in the present proceedings extracted and relied upon that Coordinate Bench order, which in turn had reproduced the operative and concluding portions of the Supreme Court judgment in Union of India v. Mohit Minerals Private Limited.