Writ Is Maintainable Against Invalid IGST Demand When Airline Is Neither Recipient Nor Payer of CRS Services

ORDER

1. Heard learned Counsel for the parties.

2. This Petition assails the Order dated 4th February 2025, passed by the Additional Commissioner, CGST and C.Ex.Mumbai Central, whereby the demand of IGST of Rs.24,41,60,160/- was confirmed under Section 74(9) of the CGST Act, 2017, imposing equal amount of penalty along with the applicable interest thereon.

3. The arguments advanced by Mr.Darius Shroff, the learned Senior Counsel for the Petitioner, reduced to their essence, is to the effect that, the services provided by the Computerized Reservation System (‘CRS’ for short) Companies were pursuant to the Agreement entered into directly by the CRS.

4. The Petitioner is the Operator of Singapore Airlines in India, being a distinct legal entity, is neither the recipient of service nor has paid the amount directly to CRS Companies. Under such circumstances, the Petitioner’s case is that the demand of IGST, of Rs.24,41,60,160/- would not be maintainable under Section 74(2) of the CGST Act.

5. In support of his submissions, Mr. Shroff has placed reliance on the decision of the Customs and Services Tax Appellate Tribunal (‘CESTAT’ for short) in the case of British Airways v. Commissioner (Adjn.), Central Excise, Delhi  (New Delhi – CESTAT); as well as decision in the case of Singapore Airlines v. Commissioner Service Tax, Mumbai-I, dated 26 September 2022 to submit that the Petitioner is not liable to pay the IGST as it is not the recipient of services. The learned Senior Counsel further submit that although these decisions supports the case of the Petitioner, yet, only to keep the case alive, a Show Cause Notice was issued to the Petitioner which has culminated into the impugned Order. The learned Senior Counsel for the Petitioner has argued that the impugned Order is without jurisdiction and has prayed for ad-interim relief in terms of prayer clause (c).

6. Resisting the arguments of the learned Senior Counsel for the Petitioner, Mr Mishra, the learned Counsel for the Respondent, submitted that the transaction did take place in the office of the Petitioner, in India, and therefore, the Petitioner cannot shy away from the IGST liability under the law. It is also the contention of the learned Counsel that the Order-in-Original is appealable in nature and therefore, prays for dismissal of the Petition on the plea of maintainability of the same.

7. After hearing the submissions of the learned Counsel for both sides, we are of the view that the core issue that arises for determination in this case is as to whether, the Petitioner Company would come within the definition of “Recipient”, for being saddled with the liability of the IGST levied on the transaction in question. In other words, if the Petitioner is neither the Recipient nor the payer of such service provided by the CRS whether, it could be fastened with any service tax liability for such transaction. After a cursory reading of the impugned Order, we find that the said issue calls for deeper consideration by this Court.

8. The question as formulated by this Court also pertains to the question of jurisdiction of the adjudicating authority and therefore, even though there is an alternative remedy available to the Petitioner, yet, we are of the view that the said issue needs to be examined by this Court. As such, we pass the following Order :