"This Is A George Floyd Moment For Citizens Of This Country": Delhi HC Strikes Down IGST Imposition On Oxygen Concentrators Imported By Individuals

Observing that it is a George Floyd moment for the citizens of this country while quoting "I can't breathe", the Delhi High Court on Friday held that the exclusion of individuals for recieving Oxygen Concentrators as gifts for personal use without going through a canalizing agency as per government notification dated May 3 is violative of Article 14 of the Constitution.

A division judge bench comprising of Justice Rajiv Shakdher and Justice Talwant Singh observed thus:

"The exclusion of individuals, such as the petitioner, from the benefits of the 03.05.2021 notification only because they chose to receive the oxygen concentrators as a gift, albeit directly, without going through a canalizing agency is, in our opinion, violative of Article 14 of the Constitution. While it is permissible for the State to identify a class of persons, to whom tax exemption would be extended, it is not permissible for the State to exclude a set of persons who would ordinarily fall within the exempted class by creating an artificial, unreasonable, and substantially unsustainable distinction."

Writing the prologue of the judgment, the Bench wrote:

"This is a George Floyd moment for the citizens of this country. The refrain is "I can't breathe", albeit, in a somewhat different context and setting; although in circumstances, some would say, vastly more horrifying and ghastlier. Chased and riven by the merciless novel Coronavirus, the citizenry has been driven to desperation and despair."

The development came in a 85 year old's plea challenging the levy of IGST on the import of oxygen generators as gift for personal use to India. The petitioner challenged a notification dated 01.05.2021 issued by the Ministry of Finance stating that it would force payment of IGST of 12% on the oxygen concentrator.

Issues Before the Court

- Whether the State's action, of imposing IGST on oxygen concentrators, which were directly imported by individuals, albeit free of cost, without the aid of a canalising agency runs afoul of Article 14 of the Constitution?

- Whether Article 21 of the Constitution, which includes the right to health and affordable treatment, would require the State to demonstrate that levy and collection of the impugned tax in times of pandemic, war, famine, floods, and such like conditions would subserve public interest?

- Whether Article 21 of the Constitution, imposes on the State, a positive obligation to provide adequate resources for protecting and preserving the health and well-being of persons residing within its jurisdiction?

- What relief, if any, can be granted to the petitioner?

Observing that there is no justification in excluding individuals from the purview of notification dated 03.05.2021 only on the ground that they received oxygen concentrators directly as gifts from their friends and/or relatives located outside the country, the Court held:

"The conditions prescribed in the notification dated 03.05.2021, prevent the petitioner from claiming exemption from imposition of IGST, although, the oxygen concentrator imported by him is gifted [i.e., has been received free of cost] and is for personal use. Condition no. 1, which exempts from the imposition of IGST only those oxygen concentrators that are imported, for COVID relief through canalizing agency creates, to our minds, a manifestly arbitrary and unreasonable distinction between two identically circumstanced users depending on how the oxygen concentrator has been imported."

Furthermore, the Court held that the Courts and the State must adopt a humanistic approach being is a facet of Article 21 of the Constitution in such a situation. In view of this, the Court also went ahead to observe that there is a positive obligation on the State to take ameliorative measures so that adequate resources are available to protect and preserve the health of persons residing within its jurisdiction.

"In the same vein, the notification dated 03.05.2021 exempts imposition of IGST on oxygen concentrators which are imported free of cost, albeit, via canalizing agency up until 30.06.2021. The State could have, if it intended to treat, persons who are similarly circumstanced as the petitioner, at par with those who fall within the sway of the notification dated 03.05.2021-extended the exemption to them as well and withdrawn the same once normalcy was restored." The Court observed at the outset.

The Court also held this:

"Having found so, in our view, a declaratory relief can be accorded, to the effect, that imposition of IGST on oxygen concentrators, imported as gifts, i.e., free of cost, for personal use, is violative of Article 14 of the Constitution on the ground that an artificial, unfair and unreasonable distinction has been drawn between persons, who are similarly circumstanced as the petitioner and those who import oxygen concentrators through a canalizing agency."

Title: Gurucharan Singh v. Ministry of Finance

Click Here To Read Judgment