2018 (3) TMI 712 - HC - Service Tax

Reimbursement of service tax paid - liability of recipient of services towards service provider - case of the petitioner is that so far as service tax is concerned, the Indian Oil Corporation issued a circular dated 20.4.2016 with regard to applicability of service tax to the service provider for operation of the permanent company owned company operated outlets - Held that - respondents 1 and 2 are directed to consider the petitioner s request for reimbursement of service tax paid by them strictly in accordance with the policy circular dated 20.4.2016, within a period of three weeks from the date of receipt of a copy of this order - petition allowed.

Summary

Issues:
Challenge to order rejecting reimbursement of service tax paid.

Analysis:
The petitioner, a company-owned petroleum retail outlet, challenged the order rejecting their request for reimbursement of service tax paid to the third respondent. The petitioner contended that Indian Oil Corporation's circular clarified that applicable service tax charged by the service provider should be reimbursed. The Standing Counsel for Indian Oil Corporation agreed to consider the petitioner's claim as directed by the court in similar cases. In a previous case, the court had directed Indian Oil Corporation to reimburse service tax in accordance with the policy circular. The petitioners argued that the impugned communications violated the circular and sought a direction for reimbursement. The Standing Counsel for Indian Oil Corporation admitted that the communications were issued without noticing the circular and agreed to set them aside. The court partly allowed the writ petitions, setting aside the impugned communications and directing the petitioners to pay the service tax to the third respondent and claim reimbursement in accordance with the circular within three weeks.

In conclusion, the court allowed the writ petition, set aside the impugned communication, and directed respondents 1 and 2 to consider the petitioner's request for reimbursement of service tax paid in line with the policy circular dated 20.4.2016 within three weeks from receiving a copy of the order.