2020 (1) TMI 1721 - HC - Service Tax

Refund of service tax - rejection of the refund claim on the ground of limitation - HELD THAT - A Division Bench of this Court in COMMISSIONER OF CENTEAL EXCISE (APPEALS) vs. M/S. KVR CONSTRUCTIONS 2012 (7) TMI 22 - KARNATAKA HIGH COURT has held that the claim for refund cannot be negatived on the ground of bar of limitation period; therefore the reasoning at paragraphs at 8.7 8.8 in the impugned order being contrary to the law declared in the said case is unsustainable. However remainder of the impugned order whereby remand of the matter is made is retained intact so that the remand exercise would be done by the concerned authority in a time bound way. The impugned order is set aside and consequently refund cannot be denied on the ground of limitation - Petition allowed in part.

Summary

The Karnataka High Court, through Justice Krishna S. Dixit, partially allowed the writ petition challenging the denial of a service tax refund by the Commissioner of Service Tax. The Court held that the impugned order's rejection of the refund claim on the ground of limitation, specifically paragraphs 8.7 and 8.8, was "contrary to the law declared" by a Division Bench in *Commissioner of Central Excise (Appeals) vs. M/s. KVR Constructions* (W.A.No.2992-93/2009), which held that refund claims cannot be negatived on limitation grounds. Consequently, those paragraphs were set aside.However, the Court retained the remand portion of the order, directing the concerned authority to complete remand proceedings within three months to determine "whether vendor-assessee of the petitioner has remitted the tax amount to the Government." If affirmed, the refund must be granted "forthwith" with statutory interest, and a compliance report submitted to the Registrar General. No costs were awarded.