2019 (8) TMI 635 - HC - Service Tax

Refund of Service Tax - service tax deposited by the petitioner for the period 2007-16 - time limitation - Unjust enrichment - burden has been shifted by the petitioner on the customers i.e the service recipient or not - HELD THAT - The fact remains that the service tax for the period in question was deposited by the petitioner but after realizing it from its customers. This fact is not disputed. It is also not in dispute that no refund application was filed by these customers. There is no infirmity in the opinion recorded by the statutory authority to hold that if the burden of the service tax has been shifted on the customers - petition disposed off.

Summary

Issues:
Claim for refund of service tax rejected on grounds of unjust enrichment.

Analysis:
The judgment pertains to a writ petition filed challenging the rejection of a claim for refund of service tax by the petitioner under the provisions of the Finance Act, 1994. The Assistant Commissioner rejected the claim on the basis that the burden of the tax had been shifted to the service recipient, which would result in unjust enrichment, citing the Constitution Bench judgment of the Supreme Court in the case of Mafatlal Industries versus Union of India. The petitioner contended that the services provided for a long-term lease of 30 years or more were not taxable under Section 104 of the Act, but failed to provide documentary evidence to support this claim.

The Court acknowledged that the service tax for the relevant period was indeed deposited by the petitioner after recovering it from customers, a fact that was undisputed. It was also noted that none of the customers had filed any refund application. In light of these circumstances and the legal precedent established by the Supreme Court, the Court found no error in the opinion of the statutory authority that allowing a refund to the petitioner would lead to unjust enrichment. Thus, the Court upheld the decision of the Assistant Commissioner to reject the claim for refund.

In conclusion, the writ petition challenging the rejection of the claim for refund of service tax was disposed of by the Court, affirming the decision of the statutory authority. The judgment underscores the principle of unjust enrichment in tax matters and the importance of providing necessary documentary evidence to support refund claims, especially when the burden of tax has been passed on to customers.