FACTS OF THE CASE (Professional Language)

M/s The Oriental Insurance Company Ltd. (hereinafter the Petitioner) filed Writ Petition under Article 226 of the Constitution of India challenging:

  1. The Order‑in‑Original dated 29.12.2023,
  2. The Order‑in‑Appeal dated 11.07.2024, and
  3. The Show Cause Notice dated 27.09.2023 issued by the Respondents (Additional Commissioner, CGST, Delhi North & Anr.).

The dispute centered on whether GST was leviable on re‑insurance services availed by the Petitioner from 01.07.2017 to 24.01.2018, in view of notification changes and the subsequent issuance of Circular No. 228/22/2024‑GST dated 15.07.2024 clarifying GST liability on such services.

ISSUES INVOLVED

Primary Issue:
Whether re‑insurance services provided to the Petitioner during the period 01.07.2017 to 24.01.2018 were liable to GST, despite the relevant original tax orders having been passed before issuance of the clarificatory Circular in July 2024.

PETITIONER’S ARGUMENTS

The Petitioner contended that:

  • The orders impugned were passed before the GST Council’s recommendation and the subsequent Circular issued on 15.07.2024, which regularised GST liability on re‑insurance services on an “as is where is” basis.
  • It relied on a coordinate bench’s decision in AXA France Vie‑India vs. Union of India & Ors. (civil writ petition) where similar issues on the interpretation of notifications/Circular were examined.
  • Therefore, the Petitioner's services should be entitled to benefit of the clarificatory Circular retroactively for the specified period.

RESPONDENT’S ARGUMENTS

The Respondents submitted that:

  • The original and appellate orders were passed prior to the clarificatory Circular being issued;
  • Hence, the benefit of Circular dated 15.07.2024 could not be extended to the Petitioner for a period when no such clarification was in force. 

COURT ORDER / FINDINGS (Professional Summary)

The Division Bench of the Delhi High Court (Justice Prathiba M. Singh & Justice Shail Jain) held that:

The Circular dated 15.07.2024 represents a valid exercise of regularising the GST liability “as is where is” basis for re‑insurance services of exempt insurance schemes (Notification No. 12/2017‑CT(R)) for the period 01.07.2017 to 24.01.2018.
 Although the impugned orders were passed before issuance of the Circular, the benefit of the same could not be denied to the Petitioner.
 The applicable Circular and the GST Council recommendations (inclusive of clarifications regarding the amendment timeline for notification entries) make the position clear that GST liability for re‑insurance services is regularised for that period.
Accordingly, the Order‑in‑Original and Order‑in‑Appeal were set aside and benefit of Circular dated 15.07.2024 was extended to the Petitioner.
The writ petition was allowed and disposed of accordingly. 

IMPORTANT CLARIFICATION (Key Takeaway)

• A clarificatory Circular issued by the GST Council/Department can operate retroactively in the context of regularising liability for certain services, even where original tax orders were passed earlier, where the policy intent and statutory framework support such application.

• The decision also affirms that Coordinate Bench rulings (e.g., AXA France Vie‑India) must be considered whilst interpreting GST liability issues especially where exemptions and notifications have undergone amendments.


SECTIONS & LAW INVOLVED (without losing meaning)

  • Article 226, Constitution of India (Writ Jurisdiction)
  • GST Council Circular – Circular No. 228/22/2024‑GST (15.07.2024)
  • Notification No. 12/2017‑CT(R) governing GST exemptions on insurance schemes
  • Interpretation of Notifications / Amendment Effects under GST Regime

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/PMS26092025CW101712025_191924.pdf 

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