Jet Airways Not Entitled to get Tax Refund for carrying Sky Marshalls before 8th October 2003: Delhi HC [Read Order]

Flight Tickets - GST - tAXSCAN

A division bench of the Delhi High Court dismissed a petition filed by Jet Airways India Ltd claiming refund of Rs. 2.36 crore of the Inland Air Travel Tax (IATT) deposited by it for the period between October 1, 2001, to October 8, 2003, for carrying Sky Marshals.

Petitioners approached the High Court seeking refund of Inland Air Travel Tax (IATT) deposited by it for the period, 1st October, 2001 to 8th October, 2003.

In view of the increasing threat perception to air passengers, crew and aircrafts, the Government of India issued a Notification making it mandatory for air carriers to carry Sky Marshals free of charge. The deployment of Sky Marshals was to be done by the Bureau of Civil Aviation Security from time to time. Initially, this obligation was imposed only on Indian Airlines.

Subsequently, the Government exempted the Indian Airlines from payment of IATT and thereafter, the obligation to deploy Sky Marshals, was extended to private airlines as well.

As per this notification, the Petitioner had to necessarily carry Sky Marshals on board its aircrafts. Thereafter, the Finance Ministry issued Notification dated 8th October, 2003 extending the exemption granted to Indian Airlines from payment of IATT to all domestic private airlines.

In view of the above findings, the petitioners claimed that Sky Marshals who were deployed on its aircrafts are not `passengers’ within the meaning of Section 41(f)(ii) of the Finance Act, 1989 and hence no IATT is payable on the sky marshals.

Though the petitioner had approached the Commissioner of Customs on appeal, it had dismissed the same finding that the airliner had gone in appeal after a delay of 400 days and had not even made an application for condonation of delay.

A bench comprising Justices S Muralidhar and Prathibha M Singh dismissed the petition finding that that the exemption from paying IATT on carrying Sky Marshals was extended to private airlines only on October 8, 2003.

Upholding the order of the Commissioner, the bench noted that the appeal was delayed by more than 400 days and not even an application for condonation of delay was filed by the Petitioner.

It said that the Assistant Commissioner of Customs (IATT) was justified in not allowing the refund claim for the above period since it “cannot be faulted with inasmuch as it is a matter of fact that Notification No.2 of 2001 dated 19th April, 2001 granted the exemption from IATT to only sky marshals performing inland journey by air on free tickets issued by the Indian Airlines. The exemption was only subsequently extended to other domestic private airlines. Thus, there is no error in the order impugned.”

Read the full text of the Order below.

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